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■I V 



THE SOCIOLOGICAL THEORY OF CAPITAL 



THE SOCIOLOGICAL 
THEORY OF CAPITAL 

BEING A COMPLETE REPRINT OF THE 

NEW PRINCIPLES OF POLITICAL 

ECONOMY, 1834 



BY 



JOHN RAE, M.A. 



SOMETIME MASTER OF THE GORE DISTRICT GRAMMAR SCHOOL, HAMILTON, ONTARIO 
AND DISTRICT JUSTICE AT HANA, EAST MAUI, HAWAIIAN ISLANDS 



EDITED, WITH BIOGRAPHICAL SKETCH AND NOTES, BY 

CHARLES WHITNEY MIXTER, Ph.D. 

PROFESSOR OF POLITICAL ECONOMY IN THE 
UNIVERSITY OF VERMONT 



THE MACMILLAN COMPANY 

LONDON : MACMILLAN AND CO., LIMITED 
1905 



r 



?s5 



O 



cL 



OiaSOOW : PRINTED AT THE UNIVERSITY PRESS 
BT ROBERT MAOLKBOSE AND CO. LTD. 



^ TABLE OF CONTENTS 

AND SUMMARY OF PRINCIPLES 



PAGE 



Introduction, 1 



CHAPTEE I. 

[Of Economic Ambition and the means essential to 
ITS Realization], 

It is characteristic of man to provide for the wants of the 
future, by the formation of instruments ; and his power to 
make this provision is measured by the extent and accuracy 
of his knowledge of tlie course of natural events. 



CHAPTER 11. 

Or THE Circumstances Common to all Instruments 

AND OF THOSE PROPER TO SOME, . . . . 19 

There are three circumstances common to all instruments. 
(1) They are formed, or receive a capacity to produce certain 
events fitted to supply future wants, by labour [applied to 
materials,] either directly or indirectly. (2) Before their 
capacity is exhausted and they pass from the rank of 
instruments [back again] to that of materials, they yield 
a return, or produce certain events fitted to supply future 
wants, which may be estimated in labour. (3) Between 
the period of their formation and that of their exhaustion, 
a space of time intervenes. Some instruments can be easily 
moved from place to place, others cannot. The former are 
termed goods or commodities. 



vi TABLE OF CONTENTS 

CHAPTER III. 

PAGE 

Or Certain Circumstances arising from the Insti- 
tution OF Society, 25 

Statement of some generally admitted principles concerning 
the nature of man and of society, which it is necessary to 
assume in the progress of the subsequent investigations. 

CHAPTER IV. 

[A Method for the Comparison of Instruments], . 31 

Every instrument may be arranged in some part of a series, 
of which the orders are determined, by the proportions 
existing between the labour expended in the formation of 
instruments, the capacity given to them, and the time 
elapsing from the period of formation to that of exhaustion. 

CHAPTER V. 

[Of Certain Technical] Circumstances Governing the 

Amount of Instruments Formed, . . . . 42 

In every society considerably advanced in art, that is, in 
every society the members of which have acquired an exten- 
sive knowledge of the trains of events supplying the wants of 
man, which the materials tl.ey possess [when formed into 
instruments] are capable of generating, there is no assignable 
limit to the capacity that may be given to these materials, 
or to the amount of [contrived] events which the instruments 
that may be formed out of them may bring to pass ; but 
that capacity cannot be indefinitely increased without carry- 
ing the stock of instruments owned by the society to an 
order of slower return — that is to say, without [either] 
extending the period between their formation and exhaus- 
tion, or diminishing their return [in proportion to the outlay 
on their construction]. It so happens, that, other circum- 
stances being equal, [that is, principally, in the absence of 
increase of knowledge], the wider the circle of events 
embraced [or, of materials with which " natural events " are 
associated], the returns made by the instruments constructed 
take place in a more distant futurity. [In other words, with 
mere non-inventive expansion of instrumental production, 
the rate of return declines ; because the results are achieved 
eitiier with greater outlay or more tardily.] 



TABLE OF CONTENTS vii 

CHAPTER VI. 

PAGE 

Of the Circumstances which Determine the Strength 

OF the Effective Desire of Accumulation, . 52 

The order to which the instruments formed by any society 
will be carried, is fixed by the relative estimation of 
its members of events taking place at present, and at a 
future period, which is denominated the effective desire of 
accumulation. This is chiefly determined (1) by the dis- 
tinctness of the mind's conception of future events, which 
again depends on the strength of the intellectual powers ; 
(2) on the desire felt for the production of practicable future 
events. The latter circumstance is regulated by the strength 
of the moral powers, or what in these investigations are 
termed the social and benevolent affections. As the exist- 
ence of the individual is precarious, and his power of enjoy- 
ment continually diminishing, the more the state of feeling 
and action pervading any community separates individuals 
from one another, the more limited will be the range of events 
[or materials] which the effective desire of accumulation of 
the members of that community will embrace. On the con- 
trary, as, though individuals perish the race remains, the 
more the interests of the individual are identified with those 
of others, the wider will be the circle of events which the 
accumulative principle will comprehend. Isolation of feeling 
and action weakens the accumulative principle by separating 
the interests of individuals, and so contracting its sphere of 
operation ; community of feeling and action strengthens it, 
by connecting the interests of individuals, and exciting them 
to comprehend within the circle of their operations a more 
extended series of events. 



CHAPTEE VII. 

Of Some of the Phenomena arising from the Different 
Degrees of Strength of the Effective Desire of 
Accumulation in Different Societies, . . . 65 

The state of feeling and action, the consequent strength of 
the effective desire of accumulation, the orders of instruments 
and some of the circumstances thus produced, among hunting 
and pastoral nations, in the Chinese Empire, in modern 
Europe, and among the ancient Romans. 



TABLE OF CONTENTS 



CHAPTER VIII. 

PAGE 

Of tmi<: Division of Employments, and of other Pheno- 
mena Produced by Efforts to Accelerate the 
Exhaustion of Instruments, 102 

When in consci[uence of the progress of art [invention] and 
the strength of the acounmhvtive principle, there are many 
extended trains of [contrived] events, or arts, going on in any 
society, and when, consetjuently, there exist many sets of 
tools or instruments pioduoing them, each individual betakes 
himself to the production [conduct] of some particular train, 
and to the formation of the instruments necessary for carry- 
ing it on. By this means, no instruments lie idle, which 
must be the case were every man to practise several arts ; 
and, consequently, they are more speedily exhausted, and 
pass to orders of quicker return. This division of employ- 
ments introduces the necessity of the exchange of com- 
modities. The exchange of commodities is regulated by the 
labour respectively expended on them, in conjunction with 
the time at which it was expended, reckoning the effects of 
the latter bj' the orders at which instruments actually stand, 
[which last determines the prevailing rate of profit at any 
time]. The existence of exchange occasions a choice being 
made of some commodity, which is kept [uniquely made use 
of] for the purpose of being exchanged with all others, and so 
comes to name the rates at which they exchange, or to fix 
[express] their values. The commodity chosen for this pur- 
pose is termed money, and, among communities possessing 
the precious metals, consists of them. Exchanges are also 
effected bj' means of credit. . . . The general prevalence of 
credit, and of the use of money, has produced the [customary] 
mercantile mode of calculating the returns of instruments, by 
profits and interest. [This system of calculation, while exceed- 
ingly advantageous in the conduct of affairs, is a serious 
impediment to the pliilosophical understanding of capital.] 

CHAPTER IX. 

[Of Invention Considered as a General Sociological 

Principle], 132 

[it is necessary to investigate the causes of progress in any 
department of human aff"airs, and not to take them for 
granted, man being essentially imitative. Motives exciting 
to innovation and the opposing forces external to and within 
the inventor. Though in respect to the individual, mani- 
festations of the inventive faculty imply a superiority in 



TABLE OF CONTENTS ix 

PAGE 

some of the intellectual powers, in respect to a society they 
imply a preponderance of the social and benevolent affections. 
One of the final and contingent results, however, of intestine 
commotions, persecutions, wars, and the like, seems to be to 
advance the inventive faculty.] 

CHAPTER X. 

Of the Causes of the Progress of Invention and of 
THE Effects arising from it, [as it Concerns 

itself WITH THE MATERIAL WORLD], . . . 151 

Invention, the discovery of neiv possible existences, becomes 
an active principle by exerting a formative power on old 
actual existences. By reason of the nature of the world in 
which man lives, change exposes to his view new successions 
of events, which excite him to observe them, and weaken the 
retarding influence of the principle of servile imitation. The 
effects on instruments of the progress of invention, are to 
produce improvements in them, and to carry them on [back] 
to orders of quicker return, [and so for the time being to 
advance the rate of profit]. 

CHAPTER XL 

Of Exchanges between Different Communities [of 

Commodities other than Luxuries], . . . 204 

Exchanges between societies, [that is, between the members 
of different societies,] are not directly regulated by the quan- 
tity of labor, [plus the time of its outlay], expended on the 
commodities exchanged. Increased facility in the exchange 
of utilities [articles which are not luxuries] operates in the 
same manner as the progress of invention and improvement, 
and carries instruments to the more quickly returning orders. 
[An interruption of the exchange of such articles may have, 
however, indirect effects precisely opposite to the direct 
effects. ] 

CHAPTER XII. 

Of Waste, [or Pure Economic Loss], . . . .213 

The loss which, in any society, the capacity of instruments 
sustains by the operation of fraud and violence [and other 
similar causes], seems to be nearly inversely as the strength 
of the accumulative principle ; . . . 



X TABLE OF CONTENTS 

CHAPTER XIII. 

PAOE 

Of the Effects Resulting from Diversities of Strength 
IN the Accumulative Principle, in Members of the 
same Society, 218 

In tlie same society, instruments (excepting those that cannot 
be exchanged, forming a stock reserved for immediate con- 
sumption) are kept at nearly the same orders, because 
prodigals, or individuals in whom the accumulative principle 
is weaker than the average, can exchange the instruments 
they possess for more, according to their estimation of the 
future and the present, than they are worth, and therefore 
[do] transfer them ; while frugal persons, or individuals in 
whom the accumulative principle is stronger than the average, 
find exercise for it in acquiring instruments transferred by 
prodigals. [It thus chiefly comes about that there is an 
economic stratification of the members of each society. This 
last leads to the consideration of some of the interrelations of 
the principles of accumulation and of population.] 

CHAPTER XIV. 
Of the Principle of the Division of Labour, . . 237 

The division of labour ought to be considered rather as a 
result than a cause. [That is, it comes into existence through 
the antecedent progress of invention. It is not, as Adam 
Smith supposed, a prime mover in the course of human 
affairs.] 



APPENDIX. 



ARTICLE I. 

[Of the Nature and Effects] of Luxury, . . .245 

There is a propensity among men to attain [a factitious] 
superiority over one another. This may be termed vanity, 
and is gratified by the evident possession of things which 
others have not the means of acquiring. It calls for the 
possession of commodities of which the consumption is 
conspicuous, and which cost much labor, though not better 
qualified, or but little better qualified, to supply real wants, 



TABLE OF CONTENTS xi 

PAGE 

than other commodities costing little labor. The comparison 
of the physical qualities of such commodities does not afford, 
therefore, the means of measuring them by one another. 
Hence the assumption, on which the preceding investiga- 
tions have proceeded, that all commodities compare with one 
another by their physical qualities [by the physical " events" 
they produce], is incorrect. In so far as any commodity, 
when compared with another, excels it only in the gratifica- 
tion it affords to vanit}^ it is to be considered a luxury • in 
so far as it compares with others in the capacity which its 
physical qualities give it to gratify real wants, it is to be 
considered as a utility. The progress of invention and improve- 
ment have no effect in carrying instruments, directly or 
indirectly producing luxuries, to more quickly returning 
orders ; on the contrary, they carry them to the most slowly 
returning orders of which the strength of the accumulative 
principle admits the existence. The labor expended in 
the formation of luxuries, is so much direct loss to the 
community, one man's superiority being here equivalent to 
another's inferiority. The amount thus dissipated depends 
on the force of the social and benevolent affections, and 
intellectual powers, as compared with that of the selfish 
feelings, and is therefore, inversely as the strength of the 
accumulative principle. 



ARTICLE 11. 

[Of Exchange Between Different Communities of 

Commodities which Minister to Luxury], . . 277 

Increased facility in the exchange of luxuries has an im- 
mediate tendency (in contrast to what happens in the case of 
utilities), to carry instruments to the more slowly returning 
orders. [The first effects of restrictions upon trade in this 
class of commodities, on the contrary, are beneficial, whereas 
their ulterior effects may be injurious. The relative effects 
of restriction and free competition, when opportunities for 
observation present themselves, afford a means of ascertain- 
ing how far commodities are or are not luxuries.] 



AETICLE III. 
Of the Operations of the Legislator on Luxuries, . 286 

The art of the legislator may applj to the purposes of the 
state, funds naturally dissipated in luxuries. 



xii TABLE OF CONTENTS 

ARTICLE IV. 

FAOE 

[Of the Art of the Banker], 297 

[Part I.— Of Banking in General.] 

The modern art of banking consists iu the generalization of 
all ci'edit transactions [throughout a oonimunity], and an 
emission of paper money, or money of ciedit. Its introduc- 
tion into any community by facilitating the exchange of 
instruments, quickens their exhaustion [and formation], and 
carries them to the more speedily returning orders. 

[Part II.— Of P.articular Systems of Banking.] 

[The Scotch banking system described and contrasted with 
that of England. Further consideration of the utility of 
banks in increasing the efficiency of the money of a com- 
munity, whetlier specie or banker's money. Strictures upon 
Adam Smith's views on monetary subjects.] 



ARTICLE Y. 

Of the TVealth of N'atioss as a Branch of the Philo- 
sophy OF Induction. [Of the Spirit and IVIethod 
of Science], 329 

Adam Smith's great work is to be considered as a philo- 
sophical system, the object of which is to explain known 
phenomena, on popular principles, not as an inductive 
inquiry, leading to the discovery of the real laws deter- 
mining the succession of those phenomena. [This last form 
of procedure alone can claim the rank of true science.] 



ARTICLE VI. 
[Oi THE Theory of Population] 35-1: 

[It is an error to assimilate man to the lower animals as 
regards the laws of his propagation. We have to take cog- 
nizance of things psychological and social as well as of things 
physiological and individual, and the former set of causes are 
of predominating; influence both in advancing and declining 
states. Tiie principle which increases and maintains the 
numbers of mankind may be termed tli'' effective desire of 
offs^n-iiiij.] 



TABLE OF CONTENTS xiii 

ARTICLE VII. 

PAGE 

[Of the Doctrine of Laissez Faire with Special 
Reference to] the Operations of the Legislator 
in Bringing the Arts of Foreign Countries to 
His Own, 359 

Instead of there being any grounds for a presumption against 
legislative interference, frona the assumption that nature 
ought to be allowed to pursue her own plans ; the presump- 
tion is, on the contrary, that nature gave man his peculiar 
faculties for the purpose that universally, and as well here 
as elsewhere, he might acquire the direction of events, by 
discovering the laws regulating their successions. 



ARTICLE VIII. 

[Of the Supposed Identity of the Causes Giving Rise 

to Individual and National Wealth], . . . 377 

[Part I. — When Assumed as a Self-Evident Truth.] 

The causes giving rise to individual and national wealth are 
not precisely the same. Individuals grow rich [generally and 
characteristically] by the acquisition of wealth previously 
existing ; nations, by the creation of wealth that did not 
before exist, [which l^st comes about through invention.] 

[Part II. — When Deduced from an Ingenious Theory.] 

The legislator may stimulate invention by the introduction of 
new arts ; [that is, by the encouragement of the transfer of 
old arts to a place where they are new, and where they make 
adaptations to the changed physical and social environment.] 

Author's "Notes," 448 

Residua, 466 

Reader's Guide, 484 



EDITOR'S PREFACE. 

The original work of which this volume is a reprint, was 
published in Boston in 1834 under the unfortunate title, 
Statement of Some New Principles on the Subject of 
Political Economy, Exposing the Fallacies of the System 
of Free Trade, and of Some other Doctrines Maintained 
in the " Wealth of Nations."'^ This title was a misnomer, 
for the chief part of the undertaking consisted not in 
strictures on the doctrines of Adam Smith, but in an 
independent, elaborate, and profound treatment of the 
general subject of capital. It is this last which has recently 
brought Rae into notice with the present generation of 
economists in connection with the world-wide discussion of 
capital, upon new and fruitful lines, inaugurated by Bohm- 
Bawerk. 

I may add here that the first article by me upon Rae 
("A Forerunner of Bohm-Bawerk," Quarterly Journal of 
Economics, January, 1897), had a title which was also in 
great measure a misnomer. Rae is not a mere " anticipator 

^ It was divided into three " Books " named respectively — " Individual and 
National Interests are not Identical" (two chapters, 77 pages); "Of the 
Nature of Stock and of the Laws governing its Increase and Diminution " 
(fifteen chapters and an "appendix," 280 pages) ; and "Of the Operations of 
the Legislator on National Stock" (three chapters, 29 pages). To this were 
added twenty-seven pages of "Notes" at the end of the volume. 

Of the several defects in book-making which seriously handicap)" ed the 
work, the most considerable was the putting first of all of two long-dr iwn-out 
chapters, highly controversial in their nature, and by far the most diificult in 
the whole. It must be that many a reader never got beyond or even through 
them. 



•^v 



xvi EDITOR'S PREFACE 

of the discoverer" (to use one of Carman's phrases), but 
the discoverer himself. By reason of the lack of a theory 
of invention, Bohm-Bawerk's doctrine of capital, although 
coming much later, is in essentials the less complete of the 
two. This contention I have attempted to substantiate 
in my second article (" Bohm-Bawerk on Eae," Quarterly 
Journal of Economics, May, 1902) reviewing Chapter XI. 
of the second edition of the Geschichte und Critik der 
Capitalzins-Theorien. 

In view of the chief interest which now attaches to Eae's 
work, it has been deemed advisable, in response to numerous 
demands, to bring out this republication in an entirely new 
dress. That part of the second " Book " (the greater part) 
which possesses a unity of its own, and which deals pre- 
dominantly with the subject of capital, is given precedence, 
under a more significant title, which attaches to the volume 
as a whole ; and the remainder, considerably rearranged, is 
reproduced in an appendix. The original work in its 
entirety is thus made available and, it is thought, more 
readable. 

It has not been considered advisable in all instances to 
distract the attention of the reader by indicating the minor 
editorial changes in the text ; but care has been taken in 
every instance (with the exception of one passage on pages 
8 and 9). to point out all alterations of consequence. 
Additions to the titles of chapters, and some wholly new 
titles supplied by the editor, are indicated by brackets in the 
Table of Contents which are not repeated in the body of the 
work. These new titles are occasioned by the appearance 
of new chapters in the editing, and by the fact that in some 
instances there were formerly no titles proper. As several 
publications have made extensive page references to the 
original volume, a Reader's Guide has been placed at the 



EDITOR'S PREFACE xvii 

end of the present volume, by means of which the location 
in the reprint of any passage of the original can readily be 
traced. 

A few words having a special bearing upon the biography 
are not out of place here. 

When I first became interested in Kae's theory of capital, 
under Professor Taussig's direction in the economic 
seminary at Harvard University, there existed no printed 
information (except in his Preface) in respect to Eae 
himself ; and for a long time nothing could be learned 
through inquiry in quarters which promised well in Canada 
and Great Britain. The late Professor Dunbar of Harvard, 
who always displayed a keen interest in the undertaking, 
urged me to persist, and at length a letter printed in the 
Montreal Star drew forth two replies, one from the Canadian 
antiquary Mr. H. J. Morgan, the other from the late Eobert 
S. Knight of Lancaster, Ontario, a grand-nephew of Eae. 
This set me upon the right road to get into communication 
with several people who knew Eae personally. Of these 
the one who could tell me most was the late Sir Eoderick 
W. Cameron of New York, a former pupil and life-long 
friend, at w^hose summer residence on Staten Island Eae 
died. Better still, I was able through the interest and 
kindness of this gentleman to come into possession of what 
few papers Eae left at his death. That is, I obtained all 
Eae's effects of a literary nature which seem now to be in 
existence. Apparently, from statements made by Sir 
Eoderick, there was another set of papers which Eae had 
with him at the time, but which were destroyed or in some 
way lost. The papers I obtained were little more than odds 
and ends, mostly unfinished fragments on a great variety 
of subjects, unfortunately but little on economics. Their 
chief use has been to help me to a fair understanding of 

b 



xviii EDITOR'S PREFACE 

Eae's life, which I have been able, however, only very 
imperfectly to set forth. 

I have received much information and kind assistance in 
this part of my work from not a few people in Canada, the 
United States, Honolulu, and Great Britain. I trust they 
will accept this general acknowledgment of my sense of 
indebtedness to them. 

To Mr. L. W. Zartman of Yale University my especial 
thanks are due for assistance in preparing the copy for the 
printer, and in reading the proofs. 

I am also much indebted to Mr. Wilmot H. Thompson 
of the Graduate School of Yale, for revision of the classical 
quotations. 

Finally, I wish here to express my obligations to Professor 
Irving Fisher of Yale University. His interest and 
encouragement have been of unfaihng support. The proof 
sheets of the whole book have passed his able scrutiny, and 
his direct help in many other ways has been invaluable. 

C. W. M. 

BURLIXGTOX, 

Vermont, July, 1905. 



BIOGRAPHICAL SKETCH. 

Three men of note have borne the name John Bae ; and 
because of frequent misunderstanding it is worth while 
here once for all clearly to distinguish them. There is first, 
reversing the chronological order, the John Eae now living 
in England, born at Wick, Caithness, in 1845, educated 
at the University of Edinburgh (Hon. LL.D., 1897) 
journalist by profession, and author of several well-known 
works on economic subjects. Then there is John Eae, 
M.D., for some years surgeon in the employ of the Hudson 
Bay Company, author of a work on Arctic exploration, 
rewarded by the British government as the first discoverer 
of relics of the Sir John Franklin expedition. His education 
in medicine (completed in 1833) was obtained at the 
University of Edinburgh, but his degree, an honorary one, 
came from McGill University, Montreal, in 1853. He was 
born near Stromness, in the Orkneys, in 1813, and died 
in London in 1893. Finally, there is the subject of this 
sketch, who was born at Footdee, "then a small and 
detached suburb of Aberdeen," June 1st, 1796, and died at 
Clifton, Staten Island, New York, July 14th, 1872. So 
far as is known these three North of Scotland men were 
not kinsmen. The two last are often confounded, even by 
the best informed antiquaries, more especially because each 
was known as Dr. Eae, and each resided for a part of his 
life in Hamilton, Ontario. 

Of Eae's antecedents and early life we know but little. 
His father's name was John, a merchant, " an entirely 
self-made man, the son of a peasant or small farmer." The 
mother was Margaret Cuthbert, whose family seems to have 



XX BIOGRAPHICAL SKETCH 

been rather well-to-do " large farmers, as farming went 
then." The son speaks of his father as fifteen years older 
than his mother, and of the two as markedly different " in 
character, disposition, habits, tastes, and education." 
There was one sister, Ann Cuthbert, and two brothers, 
James and Alexander. The elder brother, James, had 
remarkable inventive aptitudes, but was lost at sea in early 
life. The sister married James Innes Knight, and preceded 
Eae to Canada, at least as early as 1816, where Mr. Knight 
died not long after arrival. A son by this marriage, Eobert 
Knight, has descendants now living in Canada ; and descend- 
ants of a daughter, Jessie, who married a Mr. Thurburn, are 
living in Scotland. Later Mrs. Knight married James 
Fleming, a merchant of Montreal. There was a son by this 
marriage, Eamsay Fleming, Q.C., lately deceased. Eae 
himself had no children.^ 

While still a mere lad John Eae studied at the University 
of Aberdeen, being entered in Marischal College for the 
sessions of 1810-1811, 1811-1812, and 1814-1815. In 1815 
he took the degree of M.A.^ Later he studied medicine 
at the University of Edinburgh, but seems never to have 
taken a degree in medicine there or, indeed, anywhere else.^ 
Beyond doubt a most precocious youth, and it must be 
admitted from what follows somewhat self-opinionated, he 
had apparently a quarrel with his instructors at the time 

^ Since writing the above, Miss Dorothy W. Knight, Rae's great-grand-niece, 
has forwarded to me the following information obtained from her cousins in 
Scotland : — 

' ' The business of Rae's father was in connection with shipping, either as a 
ship builder or ship broker. He was in very comfortable circumstances — 
not great wealth, but more than the average amount of money. He was 
considered a very upright man, kind, and a lover of peace. Mrs. Rae was an 
exceedingly kind woman, and kept a comfortable home. She was a beauty ; 
dignified in her manners, and paid great attention to the manners of her 
family. Mrs. Rae died a good many years previous to her husband — sometime 
between 1815 and 1820. Subsequent to her death Mr. Rae lost his money. 
Later, in his old age, he went a voyage with one of his sons [Alexander], and 
the ship was wrecked, and both father and son drowned." 

"^ See Fasti Academiae Mariscallanae, ii. pp. 407 and 412. 

3 Considerable inquiry and incidental evidence in his papers make this 
statement practically certain. 



BIOGRAPHICAL SKETCH xxi 

of his presentation. During the course of his studies he 
had " come to the conchision that the physiological medical 
theories of the day were opposed to all true philosophy, and 
therefore fundamentally false " ; he had also reached " a 
conclusion concerning the origin of man very different from 
the orthodox one." Writing to a friend late in life he 
said : 

' ' I was preparing an inaugural dissertation , as was then 
the custom in Edinburgh, previous to taking my degree ; its 
title was " De Vita," and I intended to propound in it my 
general views. I was prevented by leading men in Edin- 
burgh who had taken an interest in me, among others Dr. 
Abercrombie, a physician in extensive practice, known to 
you perhaps as the author of some metaphysical works. 
They represented to me that the course I was preparing to 
take was highly presumptions and imprudent. I should 
at once have yielded to them with thanks, had they shown 
me that it was erroneous. But they would not listen to 
my reasons, they looked only at my conclusions. In this 
state of affairs I thought I would advise with my father. He 
knew nothing of philosophy and physiology, but he knew the 
world. His opinion was that if I was to fight I had better 
defer for a year or two till I gathered more strength, and 
then if, as I had proposed, I wished to go to Paris, where 
physiology was then more advanced than in England, he 
would consent. It was perhaps good advice, as I was then 
only twenty years of age. I had thus to pass a few years 
in gaining knowledge and experience. I turned myself to 
a subject kindred to my previous studies, and thus said to 
myself : If I am right, deep is the pit from which we men 
have opened to ourselves a passage. The deeper the pit the 
higher comparatively the height to which we have ascended, 
and therefore still greater the height we may hope to gain. 
Whence then are the forces which have so elevated us, and 
whence is it that humanity has been continually [lapsing] 
from the greatest heights to the most profound depths, and 
that its real substantial progress is to the philosophical eye 
so uncertain?" 

In 1818 Eae made a tour through Norway, but in what 
capacity is not known. Apparently the event which was 
the great turning point in his life and which was to send 
him on the beginning of his wanderings had not yet 



xxii BIOGRAPHICAL SKETCH 

occurred. Speaking of this time in later years, or of the 
year preceding, he says, " a small estate to which I was 
then reckoned heir would, I thought, furnish me with 
sufficient means to enable me to give all my energies for all 
the years I might have to live to these pursuits," that is, 
' ' to make at least a beginning ' ' toward writing ' ' a truly 
philosophical history of humanity." " But I was mis- 
taken." 

Soon after came the " change " in his " circumstances " 
to which he alludes in the Preface to his Political Economy, 
the exact nature of which we can only guess. Several 
things indicate, however, that it consisted both in financial 
disaster and an unfortunate marriage. A life-long intimate 
has written the present writer that Kae left Aberdeen 
"under a sort of bad luck, having married in haste." 
Still another acquaintance has said, speaking of the years 
1844-1845 , ' ' He was then married , his wife in education 
far beneath him, she being the daughter of a Scotch 
shepherd." 

As Eae was in his twenty-fifth year when he emigrated, 
the following shows that even years before the hand of 
adversity, which was never to leave him, had been already 
in some form or other heavy upon him. " Natural disposi- 
tion, strange and very early misfortunes, had marked me for 
a student — not a barren book-worm — but a man eager for 
knowledge — knowledge as power — the power in my concep- 
tion of being a lasting benefactor to man. Thoughts 
inspiring as these could alone have carried me over years 
of terrible suffering which I had endured before reaching 
my majority." 

With this fragment casting a dark shadow on his early 
life we pass from the period of adolescence to that of middle 
manhood. 

Eae landed in Quebec in the spring of 1821, where there 
is some evidence tending to show that he found employment 
for a time " in the lumber trade." At all events, he soon 
after set up a private school at Williamstown, Ontario, 
about fifty miles westward from Montreal, having been 
invited there to teach the children of some of the rich fur 



BIOGRAPHICAL SKETCH xxiii 

traders of the Hudson Bay Company. Not a few of his 
pupils came from a distance, and among them were his 
nephew Eobert Knight and Eoderick W. Cameron. 

Two years before the pubhcation of his Political Economy 
Eae gave up the school at Williamstown , and, residing in 
the vicinity of Quebec and at Montreal, devoted himself to 
preparing his work for the press. A considerable part of 
1834 he spent in Boston, where he received (as reported by 
Tiis sister) ' ' great attention from some literary and 
distinguished characters." Not long after this he obtained 
the head-mastership of the Gore District Grammar School, 
an advanced public academy, at Hamilton. ^ Some excerpts 
from letters written by pupils of those days may not be out 
of place here. 

" He was an accomplished scholar and taught the classics, 
having a Mr. Tassie as an English assistant. He was 
altogther a remarkable man. . . . He was quite different 
from ordinary men, or I think my youthful imagination 
would not have been so impressed as it was. He was 
undoubtedly a man of deep learning and research, and made 
a powerful impression on all who knew him. He was 
amiable and thoughtful of others." (George H. Mills, Esq. , 
Hamilton, Ontario.) 

' ' I have a very pleasant and grateful remembrance of 
dear Dr. Eae. He was very much respected and loved by 
all his pupils. I was with him at the then Grammar School 
from the spring of 1836 until December, 1837, when the 
Eebellion broke out, and our school broke up, the Doctor 
shouldering his musket and going to Toronto to fight the 
rebels. 

"He was considered a fine scholar, well up in Latin, Greek 
and Mathematics, and specially qualified in Geology, and 
also understanding French. His mind was, in fact, a vast 
storehouse of knowledge, though he had not a happy faculty 
of dispensing it. But he had a very loving disposition that 
endeared him to us all." (Judge S. J. Jones, Grimsby 
Park, Ontario.) 

^ A recommendation for this position, signed by H. Urquhart, is dated 
November 6, 1834. 



xxiv BIOGRAPHICAL SKETCH 

" Dr. John Eae was a man of great learning, and too 
little appreciated in his lifetime, like many others. . . . 
He was a great writer, sometimes writing night after night,, 
and had a lot of manuscript. . . . His conversations with 
the boys that made his house their home was even more 
to them than their school studies. He entered into all 
their sports and amusements, often bringing his chemical 
knowledge into play." (J. E. Martin, Esq., Windsor.) 

With this last especially may be joined the statement made 
by Sir Koderick W. Cameron that "Eae was a charming 
companion for young and old. He taught me rabbit, mink, 
and muskrat trapping, and other sports attractive to 
youth. . . . He was young in thoughts and acts to the 
end." 

As already shown, Eae's quiet life as a teacher at 
Hamilton was broken at one period by military service. 
A letter among his effects, written by Allan N. MacNab, 
the commander of the Hamilton Volunteers, states, " He 
was among the first who accompanied me to Toronto on 
the breaking out of the Eebellion of 1837, and continued 
on duty at the Niagara frontier and elsewhere as long as 
his services were required." A letter of Eae to his sister 
shows that he was in action — quite a considerable skirmish. 

As throwing a little further light on Eae's interests and 
activities during his residence in Canada, the following may 
be quoted from a scrap of manuscript : 

" No paper formalities ever effectually resist the onward 
march of events. We had proof of that in Canada. One- 
eighth of the lands there were deeded with all the most 
binding formalities that the best lawyers could devise to- 
the English Church. Yet all these lands have been taken 
from it. Thirty years since I ventured to predict to that 
Church that this and its other exorbitant pretensions would 
not stand. They were against the natural order of things, 
and they implied an injustice, viz., the putting Scotchmen 
in an inferior position to Englishmen. I was laughed at. 
Not a lawyer of any eminence but gave it hollow against us, 
insomuch that when we determined to make it a national 
question, and to lay a solemn protest against the whole 
thing before the British Parliament on constitutional 
grounds, I who am no lawyer was intrusted with the drawing 



BIOGRAPHICAL SKETCH xx\- 

up of that paper. It produced warm debates in both Houses,, 
was on motion of the Duke of Welhngton referred to the 
twelve English judges, who to their honor gave it in our 
favor." 

At the end of 1847 and the beginning of 1848, there 
came to Eae, as far as we know without warning, what was. 
almost a completely crushing blow — the loss of his school. 
A report was sent by the Trustees to the Governor-General, 
praying for the removal of the Head Master, on the ground 
of the "unsatisfactory condition of the school," and Eae's 
"inefficiency as a teacher." The school then numbered 
between sixty and seventy pupils. 

The Governor-General declined to act by reason of lack of 
jurisdiction ; and as the Trustees themselves could formally 
remove the incumbent only ' ' for misdemeanours and 
impropriety of conduct," they apparently got rid of him by 
closing the school. The arguments put forward in the 
petition of the Trustees^ lack the ring of sincerity, and 
Eae always felt that a cruel wrong was done him. Cherished 
among his effects is a considerable mass of letters of testi- 
monial, written at the time by pupils and parents of pupils, 
all of a most flattering nature. A former acquaintance,, 
writing recently, is of the opinion that undoubtedly the real 
reason for the action of the Trustees was Eae's religious 
views. He had become a good deal of a free thinker, and 
most of the Board were clergymen. 

However this may be, Eae was turned adrift. He went 
first to Boston, and later to New York, where he obtained 
a position in some school. While thus employed he received 
the news of the death of his wife, who had remained at 
Hamilton. Her death took place August 17, 1849, under 
particularly distressing circumstances, into the details of 
which it is not necessary to enter. Letters written by 
friends and kindred at the time show that this must have 
been a sad bereavement to the already sorely oppressed 
man. Eae himself once alludes to it as "a great and soul- 
penetrating sorrow." 

Already as early as January, 1849, Eae had been thinking' 

^ This petition, now in my possession, is dated Dec. 30, 1847. 



xxvi BIOGRAPHICAL SKETCH 

of going to California. Now that all ties binding him to old 
places and associations were severed, he prepared to carry 
his plan into execution. He took ship for the Isthmus late 
in the autumn. At Chagres he practised medicine for some 
time, and finally contracted as surgeon on the " Brutus," 
sailing from Panama. Of this part of his trip we have the 
following account : " Unfortunately she [the " Brutus "] 
did not sail as advertised, so that I waited at Panama five 
weeks, and not having given myself out for practice, spent 
every cent I had and more too. Worse than that, someone 
made the Captain, who was also mostly owner of the vessel, 
believe that I was no doctor , but only an old schoolmaster ; 
and I believe if he could he would have shaken me off. 
Being moreover a mean, greedy fellow, he made my 
situation very uncomfortable. We had a great deal of 
sickness on board, and a passage of nine or ten weeks." ^ 

In California Eae at first taught school at Colona, near 
Sutters Creek. Later he made cradles for washing and 
balances for weighing gold. There is no evidence that he 
turned gold miner himself. A large part of his stay in 
El Dorado was, taken up by a severe illness which nearly 
ended his life. 

Led on by scientific curiosity, as he explains, Eae went 
from California to the Sandwich Islands, arriving early in 
1851. The twenty years of a restless and disappointed old 
age which he spent here were not without compensations. 
He was held in esteem by several men of importance, and 
had abundant material for the most absorbing physiographical 
and sociological studies. The fire of the ambitions of his 

' This is taken fi'om a letter, or series of letters written to Cameron, and 
published with the title "Dr. Rae in California" in the Hamilton Gazette for 
Dec. 19, 1S50. It is not at all nnlikely that there are other letters by Rae to 
be found in the files of that paper during the early fifties. Under date of 
Hamilton, Jan. 15, 1852, Cameron wrote Rae: — "I intend allowing Bull to 
publish extracts from your letter. I have written them out and will forward 
you a copy of the paper, as well as several copies to your acquaintances 
throughout the country." During that and the following year Rae wrote 
several long epistles to Cameron, which he plainly expected would be published 
in some journal. The present writer was not able to confer with Cameron in 
respect to this matter before his death. 



BIOGRAPHICAL SKETCH xxvii 

youth still burning strong within him, he went resolutely 
to work (after an interval of school keeping) on an agricul- 
tural enterprise, hoping that the money gained would some 
day take him to the literary centres of the old world. He 
worked with his own hands, and with such headlong zeal 
that his friends remonstrated. But all to no avail. Failure 
came here as in almost everything else to which he put 
his hand. He explains the exasperating details in a letter 
to Willson, but I pass them over.^ 

At least as early as July, 1853, while residing at Wailuku, 
Island of Maui, Eae was Medical Agent of the Board of 
Health, a position which he also held in 1869, and presum- 
ably during the interval. One of the most interesting of 
his papers is entitled, "Journal of a Tour around East 
Maui." This was a walking expedition, lasting a month 
or two, and made for the purpose of vaccinating the natives. 
It was evidently entered upon with the keenest zest. He 
saw everything ; literally nothing of interest seems to have 
escaped him. 

According to Commissions in my possession, Eae was 
appointed District Justice at Hana, East Maui, in 1859, and 
again in 1863. From all accounts he must have been given 
this office at other times as well, but there is no documentary 
proof at hand. The position was one of some importance. 
A correspondent in Honolulu mentions one particularly 
interesting case of sorcery that came before him. He lived, 
we learn from the same source, in a solitary place far back 
from the sea ; and when he walked abroad his tall , spare 
form was seen always accompanied by two large dogs. 

In April, 1871, Cameron wrote his old friend and teacher, 

' The reference is to Hugh Bowlby Willson, son of the Hon. John Willson, 
"at one time Speaker of the Canadian Legislature." He was a barrister, 
engineer, promoter, general railway agent and commission merchant, author, 
and editor, during 1849, of the short-lived Canadian Independent, established 
in the interests of annexation. Rae was willing to be associated in this last 
enterprise, but was too much broken np at the time to take an active part. 
Willson's published works ax'e on engineering and monetary subjects. Ap- 
parently he was a man of exceptional range of ability, but always unfortunate 
and poor. There is abundant evidence in Rae's tapers that Willson was his 
best friend. Like cleaves to like. 



xxviii BIOGRAPHICAL SKETCH 

to whom several times he had been of material assistance^ 
" If you will come and spend yom- remaining years with me^ 
I will defray all your expenses from Maui to my home." 
Eae accepted this invitation, and sailed on the steamer 
" Ajax " in July. The change of climate affected him 
seriously, so that he kept his room the following winter and 
spring, and finally passed away, as already stated, in mid- 
summer. He was buried in Woodland Cemetery, Staten 
Island, in a lot purchased by Sir Eoderick, " in which two 
others, one a faithful servant and the other a distant relative, 
are buried." 

Thus far I have given in bare outline only the chief mile- 
stones, as it were, along the career of the man whose life is 
before us. It is necessary to fill in the gaps with some 
further account of what he did, and what he thought and 
felt. A scholar, not a man of action, what he did is of 
course to be found chiefly in his studies. 

Some account of a speculation which interested him in 
early youth has already been given. Another one, of a 
different sort, at that period of his life, was a scheme " for 
determining the rate and setting of a current at sea." The 
de^'.'ice for this purpose (applicable to both surface and under- 
currents) is described in some detail in one of his papers, 
but it is scarcely fitting to reproduce it here.^ 

Of the fate of this project Eae says writing to Willson : 

" I was then under a very eminent professor of mathe- 
matics in the Marischal College, Aberdeen, the late Dr. 
Hamilton, and showed it him. He allowed it sound in 
theory and ingenious, but smiled it down as impracticable. 
Though not convinced I was obliged to yield and let it go, 
as I did not wish to irritate my father. . . . Dr. Hamilton's 
objection to my scheme was that it was very good on paper, 
but that in so boisterous an element as the ocean it was almost 
absurd to think it could be of any practical utility. He 
judged of the ocean from fanciful notions he had got sitting 
in his easy chair. I knew something of it then, and have 

' The chief principle employed was that of the pressure of the water upon 
air in a cylinder to disengage at varying depths weights attached to bodies of 
different specific gravity. 



BIOGRAPHICAL SKETCH xxix 

lived on it many a long day since, and can see nothing 
absurd in the project. In fact, in weather in which a whale 
boat could live, there would be no difficulty in giving the 
globes their proper position in the water. In other weather, 
no attempt at deep sounding by the lead itself could be made 
with a prospect of success. Once a few feet beneath the 
surface all violent motion ceases. 

" I cannot but think, however, that, the temper of mind 
which led him to object was one with which all inventions 
are commonly, one might almost say reasonably, met. Nine 
out of ten of all mechanical schemes are abortive. In fact, 
they generally take their rise in this way. Some idea new, 
or conceived to be new, flits by chance across the brain of a 
man unaccustomed to new ideas. The novelty of the thing, 
and still more so the novelty of its occurrmg to himself, sets 
it on a point of view that puts all other conceptions out of 
sight and magnifies itself prodigiously. It becomes therefore 
his hobby, and he rides it, or more frequently it rides 
him. But the man who is consulted in such a case, 
especially if he has been in the habit of being so consulted, 
sees the thing in a very different light. He knows that these 
projects are almost all vanity, that some flaw in their con- 
ception makes them impracticable, or that a search would 
prove them not original. In short, that it is ten to one if 
this particular one succeed. Besides, if he be a man of 
reputation in science, he is annoyed at being obliged to give 
up time that is valual)le to the task of finding out flaws, and 
accordingly takes hold of the first that presents itself. This 
shortens his labour, keeps his reputation safe, and is probably 
a charity to the inventor. In this way it perhaps is that 
the greater number of new inventions have not had the 
sanction of the learned, and that, if given at all, it has been 
in a mighty cautious manner. I know therefore that I 
should myself have great difficulty at present to get anyone 
to take hold of a single one of my schemes, and am aware 
that I am putting your friendship to a somewhat severe test 
in asking you to attempt it." 

One of the " schemes " here alluded to was a device for a 
feathering paddle wheel for steamboats. There are diagrams 
and descriptions among his papers. The feathering was to 
take place in a vertical plane parallel with the keel, instead 
of at right angles with it, as is the case with feathering 
inventions now in use. The plan was probably therefore 



XXX BIOGRAPHICAL SKETCH 

of little practical value, but it is of interest to note that 
Eae had the idea of the importance and possibility of 
feathering paddle wheels, probably before any one else. 
Among his papers, also, is considerable in the way of 
inventive speculation on the art of shipbuilding in general, 
and several essays on aeronautics.^ 

But what interests us most are Eae's sociological (in the 
broad sense of the term) rather than his mechanical studies. 

In the Preface to the Political Economy he speaks of " a 
work on the present state of Canada, and on its relations 
with the rest of the British Empire," on which he had 
become engaged after taking up his residence in Canada. 
In 1832, while still at Williamstow^n, he addressed a petition 
to Sir John Colborne, the Lieutenant-Governor, praying for 
aid to publish a book " On the Present State and Resources 
of the Province " (title as given by H. J. Morgan). This 
petition was submitted to the House of Assembly and duly 
printed in its Journals, but there the matter seems to have 
been dropped. There is no record, so I am informed, to 
indicate that the composition was ever printed. 

In all probability, this was the work mentioned in the 
Preface : one which Eae seems to have spent much labour 
upon, and to have valued in some respects above his Political 
Economy. In one of his letters to Willson he says : 

" I had thoroughly studied Canada in both its natural and 
moral aspects, and could have told England what it really 
was and what it wanted. Had I had the least aid (£100 
would have done it), I should have accomplished this; and 
looking soberly on the matter as a thing past, it is now my 
firm conviction that I should thus have averted all the 
disasters of the Eebellion and brought on a dozen years 
earlier that period of prosperity which the province now 
enjoys. I will not inflict you with my reasons for this 

1 In a letter (undated) written to Willson we read: — "After a little re- 
flection I have decided on sending you a summary of that whole part of my 
century which relates to progression through water. I am partly led to this 
from having the chance of sending a heavy packet with safety by my friend 
J. W. Austin, Esq., of Boston, who has resided for some years in these 
islands in a position somewhat analogous to our Attorney-General, and who 
now is returning to his native soil. He will write you and receive your 
instructions as to transmitting this and the other papers he takes charge of." 



BIOGRAPHICAL SKETCH xxxi 

conviction. Had this been so I could have brought out my 
ideas concerning some points on Political Economy with 
the prospect of a fair hearing." 

And again in a letter to John Stuart Mill he writes 
apparently of this same literary undertaking as follows : 

' ' I cannot go on with my account of the Sandwich Islands 
till I see and examine them all. . . .1 have therefore 
thought of inditing a small work on Canada — Eecollections 
of Canada. Many years ago I had formed the project of 
writing an extended work on the Province, had visited all 
parts of it, collected information of all sorts concerning it, 
and had written a large part. I had intended to publish 
this before my Political Economy. Unfortunately I was. 
induced to put forth the latter in Boston, under the assurance 
from Mr. A. Everett^ that it would be appreciated there. 
He was, however, I believe scared at it. Could not make 
up his mind , nor could any one there , if I was right or 
wrong, and so passed it by with praise of its style, etc. 
This damned it. My bad success here was a bar to my 
w^ork on Canada, for as this was long and went to the bottom 
of things, my friends and the booksellers prognosticated that 
it would, like the former, be too heavy a work to be read. 
I kept the manuscript by me, adding to my stock of informa- 
tion as occasion offered, still thinking of one day bringing it 
forth. Among other mischances that have befallen, these 
manuscripts, sent to New York, seem to have been strangely 
lost. So there is an end of that. 

" However, I think I could write a small book that would 
have a certain currency. I am more inclined to think this 
from the following circumstance. Some time before leaving 
Canada, a young friend came to reside with me, and having 
something of a turn for politics was very free in his inquiries 
as to my opinions and views of matters, which I gave him 
in full. On this foundation, for he knew nothing of these 
matters himself, he goes and writes an article for Blackwood. 
I just saw it before leaving America , and found it a reflection 
of my own thoughts, though sometimes dim or distorted. 
Since landing on these shores I have had letters from 
Canada asking if I were the author and stating that the 
article had had considerable success." 

1 This was Alexander H. Everett, brother of Edward Everett, diplomat, 
editor of the North American Review, writer to some extent on economic 
subjects. His review of Rae's Political Economy is in Vol. XL. of the North 
American Review. 



xxxii BIOGRAPHICAL SKETCH 

Further than this, nothing is known of the nature or 
fate of this presumably profound treatise.^ 

The reception accorded his Political Economy was always 
a keen disappointment to Eae. He received practically 
nothing for it pecuniarily, as he informed Cameron; and it 
was not until nearly thirty years after it was published 
that he learned Mill had noticed it. Apparently he never 
knew that it was translated in 1856, in Volume XL, first 
series, of Ferrara's Bihlioteca delV Economista. 

This is not the place to give any extended criticism of 
this work, pronounced by Professor Irving Fisher {Yale 
Review, Vol. V., p. 457) to be "truly a masterpiece, a 
book of a generation or a century."^ I wish here merely 
to point out that its influence, even from the first, has been 
greater than is commonly supposed. A careful study of 
John Stuart Mill's Principles reveals many undoubted 
instances of indebtedness. Indeed, on the side of pure 
economics it may be said that it was Rae, more than any 
other, who modified the Pdcardian basis of Mill's thought. 
To an equal extent, perhaps, is Hearn in his Plutology 
indebted to Eae. This is seen not so much in particular 
passages as in the method and spirit of this admirable 
treatise. The high commendation which Jevons, Marshall, 
and Edgeworth have bestowed upon Hearn 's work, therefore, 
belongs in part to another. It may be also mentioned in 
passing that Professor Thomas Fowler in his Principles of 
Morals (Part II., Oxford, 1887, pp. 50-59) makes consider- 

1 According to one of Rae's old pupils, "J. S. Hogan made use of portions 
of Rae's history of Canada to get up an article for Blackwood for which he 
received £40 sterling." This same pupil " well recollects " Rae " often reading 
extracts from his History of Canada." Rae himself once makes bare mention 
of a "nearly completed physical history of Canada." There were two articles 
on Canada in Blackwood's Magazine during 1849, both unsigned, but dated 
Hamilton, Canada West, one or both of which must be that to which Rae and 
my correspondent refer. John Sheridan Hogan published in Montreal, in 
1855, an essay on Canada which was awarded the first prize by "the Paris 
Exhibition Committee of Canada." 

- Compare the opinion of Professor Edgeworth in Palgrave's Dictionary of 
Political Economy, and of Professor Sydney Sherwood in Johns Hopkins Uni- 
versity Studies in Historical and Political Science, fifteenth series, pp. 582-584, 
and 590-591. 



BIOGRAPHICAL SKETCH xxxiii 

able use of Kae, drawing on him at second hand through 
the quotations given in Mill's Principles. An intellectual 
candle of real power, if it be not wholly placed under a 
bushel, shines far. 

While at Hamilton, Eae had privately printed in 1843 an 
Essay on the Question of Education, in as far as it concerns 
Canada. The title page and a few detached leaves only of 
this monograph were found among his effects. Some effort 
has been made to obtain knowledge of the whereabouts of a 
complete copy, but without success. It is also known that 
in the last years of his life Eae had at least ' ' nearly 
completed " another work " On Education," but what 
became of it has not been ascertained. 

After his establishment in the Sandwich Islands, Rae's. 
studies were most multitudinous, in fact too much so : little 
was brought to completion. Some essays on geology and 
on medical subjects were indeed written out and sent home 
either to Cameron or -Willson, with the request that they 
be published in Stillman's Journal,^ or in some other 
scientific periodical ; but evidently nothing came of them.^ 

Among the manuscripts falling into my possession, by far 
the most extensive and orderly were those upon geology and 
kindred subjects, pertaining both to Canada and the 
Hawaiian Islands. These have been placed in proper 
hands, and may in part be printed. 

But though much attention while in Maui was devoted to 
geology, to questions of the welfare of the native race, and 
to his mechanical inventions, Eae's chief study was upon 
the language. He had a theory that the Hawaiian race 
represented in great purity, by reason of its isolation, an 
exceedingly primitive culture ; just as the old Norse culture 
is at present most purely represented in Iceland. He 
believed he was studying in the Hawaiian language a 
survival of a pre-Sanskrit language — the original tongue 
of a universal stone age. Apparently bold generalizations 
as to language-building, the relations between sounds and 

^ Later called The American Journal of Science and Arts. 
^ This was done, it appears, on two occasions, in 1852 and ten or twelve 
years later. 



xxxiv BIOGRAPHICAL SKETCH 

actions, were carrying him far into a most profound 
philological and anthropological speculation. I say 
apparently here, because of my ignorance of such matters, 
and because this part of his manuscript is the most frag- 
mentary and chaotic of all. 

Some of the results of his studies along these Hues, and 
also on some other matters pertaining to the existing 
condition of the Hawaiians, we know to have been printed 
in a Honolulu newspaper, The Polynesian, during the early 
sixties. 1 A few excerpts from these articles being sent by 
an acquaintance, K. C. Wynie,^ to John Stuart Mill, led 
Mill to write Kae at least once ; a communication which , 
however, was never received. A copy of a letter by Mill to 
Wyllie respecting Eae, found among the latter's effects, 
runs as follows : 

Blackheath Park, 
Kent, Feb. 3, 1863. 

Sir, — I have had the honour of receiving your letter and 
the printed slips which you have been kind enough to send. 
These I have read with the attention due to any work of Dr. 
Eae, and they appear to me quite worthy of his intellect 
and acquirements. The picture which he draws of the 
dangers that menace the interesting community of which 
you are one of the rulers, is most formidable. Of the 
remedies which he proposes, I cannot be a competent judge, 
but, as far as my means of judgment extend, he seems to 
be right in much, perhaps even in all, that he proposes. 

The other paper w^ill, I think, place Dr. Eae very high 
among ethnologists and philologists. After having reached 
by independent investigation the highest generalization 
previously made, namely, that all languages have grown by 
development from a few hundred words, Dr. Eae seems to 

1 So far as the editor has been able to ascertain, the only copies of The 
Polynesian which are available for the period when Rae contributed to 
its columns, are in the British Museum — Vols. 15-19, covering from May, 
1858, to April, 1863. 

^ Mr. Wyllie, as he states in one of his letters to Rae, was formerly "an 
East India merchant, railway director, and director (in fact, the starter) of 
the Pacific Steam Navigation Company." He was soon after deceased (about 
1865 or 1866), holding at the time a high position under the Hawaiian 
Government. 



BIOGRAPHICAL SKETCH xxxv 

have supplied the first probable explanation of the manner 
in which these primitive words may themselves have 
originated. If his hypothesis is made out, it is the keystone 
of the science of philology, it is a priori extremely probable, 
and the facts he brings forward establish a strong case of 
verification a posteriori. I hope that Dr. Max Miiller has 
been put in possession of this important speculation. 

It must be of great value to your country to have such a 
man as Dr. Kae settled among you. 

It is very gratifying to me that you are disposed to carry 
the principle of minorities into practical operation. That 
such should be questions agitated in a country which three- 
quarters of a century ago was in the savage state is surely 
one of the most remarkable signs of the very hopeful times 
in which we live. — I am. Sir, your most obedient servant, 

J. S. Mill. 
His Excellency, R. C. Wyllie, Esquire. 

After an interval Eae wrote Mill the following : 

" Sir, — Permit me to render you my thanks for having 
taken the trouble some two or three years since to write my 
late friend Mr. Wyllie concerning some papers of mine that 
had appeared in the Polynesian newspaper of Honolulu, 
and of which he had sent you copies. You may well 
suppose I was much gratified by the favourable opinion of 
one whose judgment deservedly carries so much weight with 
it as yours in all philosophical questions. I address you at 
present to request a favour. I desire to dedicate to you a 
work on the Polynesian language and its connections with 
the history of speech, and consequently of humanity. You 
could have formed but a very imperfect idea of my views 
from my letter to Mr. Wyllie, which was not intended for 
publication, and in which, from its growing too voluminous 
on my hands, I often dropped the thread of my argument 
without pursuing statements I had made to their legitimate 
consequences. I cannot of course attempt to mend the 
matter here, or to give even a summary of my argument, 
but I may state the conclusions at w^hich I have arrived, as 
well as those at which I might hope to arrive, and thus 
■explain to you the reasons which urge me to make the 
request I have preferred. 

' ' I believe it may be shown that the race from which the 
Polynesians spring was at the head of civilization of the age 
of stone, and were settled in Hindustan and along the 

c2 



xxxvi BIOGRAPHICAL SKETCH 

southern and more fertile shores of Asia. It seems, too, that, 
the facts on which my reasons rest are indisputable, the 
deduction perfectly logical, and the conclusion therefore 
irrefragable. This forms the first part of my book. The 
second pertains to the language. As to it, there have come 
into it two sounds, significant of themselves, which have a 
close analogy to the cries of the higher order of animals, 
and have somehow been modified by and incorporated into 
the articulate speech. The one is a (the broad Scotch or 
Italian a) and it may be translated action. The other is o 
which denotes distance and connection. This may seem a 
contradiction, but in reality if a thing be distant it must be 
distant from something else, and that something must there- 
fore to the mind have some relation to it or connection with 
it. The articulate sounds or syllables of the Polynesian 
language are either simple vowels, or end in vowels. There 
are about forty of them, and the remarkable fact as to all 
of them is this : When the organs of speech with the aid of 
the breath shape an articulate syllable, they also themselves 
take a shape, form and movement, and in this language, 
this shape and movement have always an analogy to the 
thing or action which the sound of the syllable or conjoined 
syllable denotes." 

Here the letter breaks off. 

Eae's manuscript in epistolary form addressed to Mill is 
rather voluminous.^ Those parts which relate to political 
economy have been printed in the Economic Journal for 
March, 1902 (Vol. XII., No. 45) and in the Quarterly 
Journal of Economics for November, 1901 (Vol. XVI.,. 
No. 1). A small additional fragment appears as Article VI. 
in the Appendix to this volume.^ 

Among the friends of Eae's later life was Abraham 
Fornander, editor of The Polynesian at the time when 
Eae's articles appeared in that journal. In the years 1878- 
1885, Fornander published a three volume w^ork, which 
attained some celebrity, entitled An Account of the 

* It is not known whether a fair copy of any of this was ever sent to Mill, 
but it is not unlikely. Rae seems also to have corresponded with Dr. William 
Beattie in England. 

^ Some excerpts from Rae's miscellaneous manuscript are also introduced at 
different points indicated in the text. 



BIOGRAPHICAL SKETCH xxxvii 

Polynesian Race, its Origin and Migrations. In the 
Preface to the first volume, among other general acknow- 
ledgments of literary obligation, we read, — " The late Dr. 
John Eae of Hana, Maui, who, in a series of articles 
published in The Pohjnesian (Honolulu, 1862), first called 
attention to the extreme antiquity of the Polynesian 
language." This is the only reference Fornander makes 
to Eae. The present writer is of the opinion that Eae 
originated most of the ideas which were followed out in this 
work by his contemporary. 

I may add in this connection that a transcription of one 
of the ancient legends of the Hawaiians with Eae's 
explanatory notes, found among his effects, has been printed 
in Volume XIII. , No. 51. (1900), of the Journal of American 
Folk- Lore. It shows a vitality not found in Fornander's 
Polynesian Fiace. 

Of Eae's inner life, especially on the intellectual side, we 
get occasional glimpses in his correspondence. Writing to 
Willson from Chagres, December 27th, 1849, he said : 



"b' 



" I have now^ for many years been an exile from the land 
which I had chosen as my home, and in which I had made 
up my mind to pass my remaining days, and within the 
present month, and in beginning old age, have become a 
wanderer and adventurer over the wide earth. You know 
the cruel injustice which has thus driven me forth. You 
partly know also the cruel sufferings thus entailed on me, 
and which have almost rent my heart. But this of good has 
resulted from all. Nature under a new face, humanity 
under an altered aspect ; a sense of danger, and a necessity 
for action, have, as it were, renewed my soul, and enabled 
me to look calmly on what I have been and what I am. 
Thus I see myself as in times past destiny seemed to have 
stamped me, I can analyze, as it were, the elements of my 
then existence, and taking my stand on what new has 
broken in on it, can measure and look on it as a thing apart 
from the present. 

Fortune has not permitted me to be the student I would 
have desired. The study of such a one is in the spacious 
library where undisturbed and uncontrolled he can roam 
over the thoughts and read the souls of men of all times and 
countries ; or else the wide world itself, with all conveniences 



xxxviii BIOGRAPHICAL SKETCH 

to explore it and examine the various aspects of nature and 
of man which it exhibits — or better still, each alternately. 
Only partially, only scantily have I enjoyed these advantages. 
But every man has a world of study within his own soul, 
and in the workings of the passions of those around him. 
This I have not neglected. . . . 

" Alas for the student, ardent and feeling, and with hopes 
like mine, pursuing truth without dread as concerns self, 
and yet shrinking from it when at length grasped as a thing, 
though having within itself the energetic powers of a new 
and better order of things yet coming on the present world, 
if receiving it, like one of the phials of wrath of the 
apocalypse. I had determined that no important writing 
of mine should appear till after my death. Thus I could 
acquit myself to the Omnipotent for not hiding what He 
had allowed me to see of what at least appeared to me light, 
and avoid the suspicion of being actuated by personal 
motives. . . . 

" What now I may do is uncertain. I know not even if 
my manuscripts are safe. Certainly a new spirit is 
awakened within me, and may lead to a new course of 
action, if I be not cut down by some of the chances which 
I see fall to so many around me. . . . 

" Now as concerns Canadian independence, or annexa- 
tion ; that also as a thing interesting in itself, and more 
especially as one to be taken as a sign of other things of 
greater interest with which the present era seems pregnant, 
had occupied at least some little of my attention ; but I had 
become accustomed to view it from a point and in a light 
different from that in which politicians of the hour necessarily 
regard it. 

" Let me explain myself. When one commences the 
study of history, it is generally under the apprehension that 
this study will serve as a master key to the problems of the 
day, and will enable him not only to form just conclusions 
concerning them, but, if so prompted, to address his con- 
temporaries with authority and power. But as he advances 
farther and farther in the pursuit, and if he has seized the 
philosophical spirit of investigating it which has begun to 
give its proper life to the inquiries of the age, he finds the 
eye of his mind conducted by it to a far higher elevation 
whence it takes in a great reach of the whole tide of 
humanity lying beneath, flowing on with unceasing current 
from the dim and cloudy mountains of the past in lengthened 
course to the immense and measureless future. Not only is 



BIOGRAPHICAL SKETCH xxxix 

his soul absorbed by the contemplation of the vast prospect, 
but he feels both the comparative insignificance of the 
immediate present and his own v^ant of power to control 
it. What is a slight turning in the course or a little ripple 
on the surface of the huge stream which, under the guidance 
of energies so mighty is hurrying on so fast and so far? 
Not only do the questions of the day diminish before him to 
mere waves chafing the shore and serving little else but to 
mark the strength of the great feelings, sufferings, passions, 
or if you will, principles which, as it were blindly and 
confusedly, though doubtless under the real government of 
an Omnipotent hand whose workings pass his ken, impel 
the mighty mass along ; but also he becomes sensible how 
insignificant individual efforts must be to control forces 
which he sees and feels bearing others and himself away 
with overwhelming energy. 

" To one having learned to view things in this light, it 
must be difficult, and I found it impossible in New York, 
to write a popular article such as the interests of your 
Journal require on a question which if not in the temper in 
which it is agitated at least in the thing itself is profoundly 
significant." 

In another letter addressed to Willson, undated, but 
apparently written from the Isthmus or California, we 
read, 

" A change has come o'er the thread of my life. You 
have perhaps seen a horse of a sort of sluggish temper, not 
deficient in any of the externals that denote some degree 
of power, but yet who seemed incapable of anything but a 
stubborn, shambling gait which whip or spur made only 
more uncomfortable. Well, gather your reins, feel that you 
are well in your saddle, and spare not but dig the iron well 
into his sides. You will rouse him ; and if you keep your 
seat through his first plungings and boundings it may be 
that you will be astonished how well and fast and far he 
will bear you. Such is the change that has come over the 
temper of my mind. The iron has pierced deep into me, it 
rankles in my very vitals, and for aught I see will do so till 
the grave cover me. I must be doing something, I have 
relief in action. . . . London, Paris, with a little capital in 
money and literary reputation have been my aim for years. 
There, with the assistance of libraries, museums, friends 
who could and might be induced to assist me, I have con- 
ceived I should have the fairest field for my literary and 



xl BIOGRAPHICAL SKETCH 

philosophical speculations, and for my mechanical schemes. 
The one would assist the other. Had it not been for those 
confounded Trustees, my plans were so laid that I feel pretty 
confident I should before this have been there, and it was 
this overthrow of my plans more than the mere ejection 
from the school that so nearly overset me, and but for you, 
I believe, would have given me my final quietus." 

Writing still again to this faithful friend, from Hana 
under date of December, 1856, Rae says : 

" If you would really help a man you must know how to 
help him. You must know in what his well-being and 
happiness consist, what therefore are his objects and aims. 
My earlier friends in Canada could not conceive or at least 
understand what were mine. They thought me foolish in 
burying the attainments and ability they were pleased to 
give me credit for in the subordinate position of a village 
surgeon, or still worse in that of a country schoolmaster. 
They could not conceive that my main need w^as quiet, to 
think out my thoughts. When after ten years of this sort of 
life I had sufficiently mastered my subjects and digested my 
problems and wished to put some of them before the world, 
they had changed their notion of me, and viewing me now^ as 
a mere schoolmaster stood aloof from me and my projects, 
and would give me neither effective countenance nor support. 
Some hinted that had I taken their advice I might have 
been in a very different position, while the prudent said, 
' What are your chances of gaining by this? How much 
will it put in your pocket? Sit quiet.' Others again, 
looking on me as a mere adventurer, and measuring me from 
my humble place and comparing it with the magnitude of 
my enterprises, seemed to say, ' What, you a village teacher, 
think you can master such high themes? The man is mad : 
we will have nothing to do with him.' ... I have found all 
men, even my most intimate friends, measuring the probable 
success of my schemes not from what they inherently were, 
but from the position of myself, the one bringing them 
forward. Thus I recollect well when I projected publishing 
my work on political economy, my friends were quite 
incredulous of my ability to controvert the doctrines of Adam 
Smith in any particular, and smiled part in pity, part in 
wonderment, at the presumption of one who had not 
been able to raise himself from the position of a country 
schoolmaster embarking on so hopeless an enterprise. 



BIOGRAPHICAL SKETCH xli 

Now had they known my motives for contenting myself 
•with what seemed to them so inferior a station, they 
might or at least they ought to have come to another con- 
clusion . It was in truth because I was engaged in important 
speculations for which school life though a drudgery yet 
gave me many hours of quiet leisure , that I contented myself 
with it. I feared that if I then pushed really into the 
battle of life these speculations would be likely to dim 
hefore me, and probably at last fade in the distance. I now 
think I was wrong in this — events at least w^ould seem to 
prove my having been so. At any rate, had I to run the 
same course over again, I would act differently. I think I 
•ought to have studied law, for which through Judge Maclean 
the way would have been open to me, and secured to myself 
a certain social position that would have enabled me in no 
long time to have given myself to pursuits more congenial 
to my feelings. I do not believe that either great success 
or comparative failure in a legal career would have been able 
to tarn me from the occasional contemplation and ultimate 
pursuit of the magnificent visions of my youth. Yet who 
tnows?" . . . 



There is evidence that at some time in his career Eae's 
friends, instead of being incredulous of his powers, had 
Urged him to ' ' push forward on some undertaking ' ' ; for 
in one fragment of epistolary manuscript we find the 
following : 

" Now this was the way to make me sit still. Even the 
fancying to myself that personal advantage was in reality 
the end of my efforts w^as sure to confound me, and the 
holding this up to me as their true aim and object completely 
paralysed me. ... It may seem incredible to you, but 
it is the real fact that these dinnings in my ears always 
brought a similar chaos over my thoughts, and if fool 
enough to try, I only floundered on from one instability 
to another. This may seem to you a strange, unnatural, 
almost mad humor of mine. So perhaps it was ; it was 
at least what doctors call abnormal, the result probably 
in part of my peculiar organization, in part of cruel 
mental suffering in early youth, the fruits, the avengers 
perhaps, of a momentary yielding to violent passions. This 
gave to the world and all it holds a real air of mere vanity 
and vexation of spirit." 



xlii BIOGRAPHICAL SKETCH 

One more passage from a letter, or rather parts of different 
letters, may be quoted, written from Maui, but to whom it 
is impossible with certainty to say. 

" From a very early period of my life I had turned my 
attention and, as occasion presented itself, bent all the 
powers of my mind to trace out the causes which have given, 
shape and form to humanity, and from whence have come 
the laws which have hitherto governed and must in future 
govern its progress. ... A train of singularly untoward 
and to me disastrous circumstances, and of such a character 
that for the honor of human nature I trust the history of 
few individuals can present a parallel [have impeded my 
endeavors] .... Nevertheless wherever I have been , and 
however situated, the idea of my youth has held possession 
of me, and has been the central point of all my researches 
and speculations. Now in my old age 1 am desirous of 
recording [as much as is possible of the results of my 
labours]. ... I can scarcely hope to tell my fellow-men 
all that during my life I have gathered together from the 
recorded past and the actual present, of the paths we have 
travelled from our first appearance on earth to the present 
hour, and the ways we have to travel to the end. To me 
the sun is surely soon to set. Yet while daylight lasts I am 
desirous of adding what I can to those stores of knowledge 
and truth which are the only substantial inheritance which 
age can bequeath to age. I had thought of commencing by 
giving a sketchy outline of what I may call my system,, 
and had in fact composed a great part of such outline. 
Certain circumstances, however, warn me that this plan is- 
imprudent, and that it is better to put forth what I know 
and desire to tell in parts, mere fragments of the great 
whole which is spread out before my view. Each to other 
men will seem fragmentary ; if I live long enough I may 
form them into a system , or rather the skeleton of a system , 
which perhaps others may till up. One of these fragments 
is the relation which the Polynesian race and language bear 
to other races and languages, and to the origin of language 
itself. My investigations as to this last point have, I think, 
led me to some important discoveries. I am now preparing 
a work on these subjects which I hope to have published 
in London. I think it more likely than any other of my 
speculations to draw some share of public attention. I have 
not, however, confined myself to this alone, but have drawn 
out the plan and partly written some essays on subjects having. 



BIOGRAPHICAL SKETCH xliii 

a bearing on what is shadowed out in my mind as a real 
philosophic history of our race. It was thus that some- 
months since I wrote the essay which I send. I had not, 
however, thought of publishing it for perhaps a year or two,, 
nor even then until it had been submitted to the judgment of 
some scientific friend who might be competent to detect any 
mistake in the mechanical part, if any there were." ^ 

And now to conclude this series of excerpts, we may set, 
down the following : standing on a bit of paper by itself,, 
and in so wavering a hand that it may well have been 
written during Eae's last illness. 

" If we regard the generous impulses, the ennobling hopes ,„ 
the lofty aspirations, that swell the breast of youth, we 
should say that the human heart was a soil in which the 
heaven-wafted seeds of every virtue might germinate and 
grow and flourish, and spread a paradise over the earth. 
But alas, when the time comes when each has to cast himself 
into the stream of actual life, the movements of whose 
impetuous current have come down from places and times^ 
far remote, the first plunge awakens him to the absorbing 
necessity of putting forth all his energies to maintain himself 
in the whirling tide. He loses sight of those landmarks- 
which were to have guided his course. Progress, Progress, 
is his cry ; and on he dashes , pushing aside and thrusting 
down." 

But in all this one gets rather a distorted picture of the 
sort of man Eae really was. The reader must consider that 
these things were written late in life, and make allowances. 
He should, especially, group with them the impressions 
derived from the work put forth by Bae in his prime. 
Those who knew him in the flesh, not primarily as a man 
of science but as a teacher and friend, represent him as 
athletic in mind and in body ; as cheerful, courageous, 
singularly devoid of all petty ambitions and meanness. He- 
was built on a large plan. 

One fault he had of an intellectual sort which stood 
seriously in his way as a successful writer, and that was a. 
marked tendency to take in all the length and breadth of 

^ This may have been -written to Dr. W. Beattie, for in a scrap of a letter- 
addressed to him is discussed the same literary project. 



xliv BIOGRAPHICAL SKETCH 

any subject, and to sound its depths. Consequently he 
always went off into digressions, frequently of excessive 
length — a habit which grew upon him. But to take in the 
length and breadth of a subject and to sound its depths is 
the mark of genius. If Rae could have had suitable 
conditions for scientific work (such as seemed open to him 
in his early youth) he would undoubtedly have been steadied 
as well as stimulated —he would have shown proper concen- 
tration—and then with his powers of imagination and range 
of information, what results might the world not have had 
from him? Or if when he came to America he had settled 
in one of the larger cities, with access to libraries and 
contact with other well-trained minds, how different would 
his life have been? But nevertheless he did not altogether 
miss his mark. His work, not without influence when first 
published, though later neglected, did not die. The revival 
of interest came when others began to exploit the same field, 
and when the science as a whole had made a great advance. 
There now seems every prospect that this interest will widen, 
and intensify, and endure. 



AUTHOR'S PREFACE. 

(The work here presented to the American reader, was composed with 
the intention of being published in Great Britain ; under this idea the 
following Preface was written. As it explains the design of the original 
undertaking, it has been thought proper that it should retain the place it 
was at first intended to occupy.) 

To promote prosperity within, to guard against danger from 
without, have ever been esteemed the two great branches of 
the duty of the Statesman. But of all the sources of internal 
prosperity, or means of repelling external aggressions, no 
one, in modern times, is of greater efficacy than wealth. 
We have, therefore, no reason to be surprised, that states- 
men should have endeavored to procure for their respective 
countries the greatest possible amount of it. If the laws 
they have enacted, and the regulations they have for this 
purpose established, have really answered the ends they were 
intended to promote, they are certainly praiseworthy. 

Of the efficacy of such laws, for those purposes, politicians 
for a long time did not doubt ; but a great revolution in 
public opinion has taken place, and almost all men who 
now pretend to understand the principles that should govern 
the policy of nations, agree in condemning them. 

This revolution in the opinions of men, had its rise in 
Erance. It might have died there, however, with the sect 
from which it had birth, had not a man of surprising genius, 
placing himself at the head of the feeble party then 
supporting it, enabled them to give their principles currency 
throughout the nations of Europe. Adam Smith will be 
recorded among remote generations, as one having power- 
fully influenced the opinions and policy of the civilized world, 



xlvi AUTHOR'S PREFACE 

during the eighteenth and nineteenth centuries. His great 
work no sooner appeared in Britain than it was read, and the 
opinions it maintained adopted, by every one who pretended 
to any knowledge of the important subjects of which it 
treated. It quickly, and with like success, spread through 
other lands. Never was the force which mere intellect 
possesses more strikingly manifested. To illustrate his 
speculations, to cast them into new forms suited to the 
varied tastes of various nations, became an employment by 
which men of undoubted genius thought themselves honored. 
His reasonings are the basis of numerous systems and 
innumerable essays. A voluminous library might be formed 
of the works of men who call him master. Nor were the 
dicta of a retired student acquiesced in, and embraced, only 
by theorists like himself. They have guided the councils, 
they have formed the text book of statesmen, and have had 
an important influence on the policy of nations. 

Against doctrines supported by so great a weight of 
authority, what, it may be demanded, can possibly be urged? 
and how comes it, that so obscure an individual as the author 
of the following pages, places himself in opposition to them? 
Custom authorises me — in a measure calls on me — in 
answer to these questions, to state to the reader how I was 
led to form opinions opposed to this system, and why I 
bring those opinions before him. 

Many years ago, I became engaged in a series of inquiries 
into the circumstances which have governed the history of 
man, or, to vary the expression, into the causes which have 
made him what he is in various countries, or has been in 
various times. It seemed to me, that, by gathering together 
all that consciousness makes known to us of what is within, 
and all that observation informs us of what lies without, 
the real agents in the production of the great events by 
which the fortunes of our race have been diversified, might 
be at least partially discovered, the laws regulating their 
procedure traced, and that thus the materials for a true 
Natural History of man might be reached. The pursuits in 
which I was then engaged led me to the subject on the side of 
physiology, and what is termed metaphysics, and imagining 



AUTHOR'S PREFACE xlvii 

that I saw a ray of light strugghng through the obscurity of 
the objects, amidst which these investigations placed me, 
I began to conceive hopes of being able to dispel some of 
the darkness, in which are involved causes that have 
produced, and are producing, results of the highest import- 
ance to us. To this pursuit I determined to devote myself. 
Such a resolution would scarcely have been taken by any one 
unless prompted by the enthusiasm natural to youth, and 
would not have been adopted by me, had I not had the 
prospect of enjoying every facility in following out the objects 
I had in view ; but a sudden and unexpected change took 
place in my circumstances, and I exchanged the literary 
leisure of Europe for the solitude and labors of the Canadian 
backwoods. I found, notwithstanding, that this accident 
could not altogether put a stop to my inquiries, though it 
retarded them and altered their form. 

I had early turned for assistance to the Inquiry into the 
Nature and Causes of the Wealth of Nations, and to the 
speculations of the political economists. But, I found 
their scope and design too confined, to advance the attain- 
ment of my purpose in the degree I had anticipated ; and I 
had besides the mortification of perceiving, that the con- 
clusions to which they led, were, in many points, opposed 
to those at which I had arrived. Encountering opposition 
where I had looked for support, I applied myself to ascertain, 
if possible, the cause, and, after having spent considerable 
time in the inquiry, conceived I had detected enough of 
fallacy in the speculations, even of Adam Smith himself, 
but more especially of his successors, to warrant the belief 
that my conclusions might be right, though the practical 
rules that might be deduced from them, would not coincide 
with those laid down in what is termed the science of 
political economy. But, though I became satisfied on this 
head, it was not my intention to have directly attacked any 
of the tenets of the school. Setting out from a new point, 
it seemed to me, that, however far 1 might advance, it would 
not be necessary for me directly to oppose, or to attempt to 
controvert, any received opinions. 

During my residence in this country, the field of my 



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iUViUi'!*. ThvMJiih I WMs U^l to tins siiulv. suupiv ivoiw i\»y 
«iosn«^ to iulvivwvo. MS l\'U' ns niv silu:U»oi\ poiiuitto*! luo. \\\ iv 
p.Uh of m\»>stij;;Uion whu'h h;\tl. to iu»\ :> \«mv h\»<ly intort^st, 
u\y pi\>soout»on of it hiiil tho oll\'ot o( uwpiossiM^ nit^ iiioro 
ilooply with !i oonvution of tho uiisinn\«lnt*ss of (ho system 
nmin(!untMl in th(^ II <.i///i of iVuhoM.w 

III (his s(!i,t;«^ v^f in> pi\^^i^^ss T hooumo oni;n4jtHl m !> work 
on \\\o pvos«M\( s(!ito v>f r;in;hl!i, iind on its rolndons 
with (ho lost o( tho l>M(>sh l''iu}>U(^ Thoso n^hitivMis sotMii 
(o mo (o spring from tht> nniliiiil homMit nnsm^ (o [\\v o»»K>nv 
t\\u\ (ho ompnt^ ("i\Mn thow con\\o\un\. 'V\u' soo( of jn^h 
tioiuns, \o w hon\ 1 ;ilhuh\ iUn^y (hii( imy ^uoh hi>notit 5vri80t» 
to oithor jvir(y \\'(M\^ (hoir n^isvMun^s i'oiioo( . i( w«miM 
folK>w as a nooossavy oonsoqnonoo. that I'anatia is. m this 
«osp»H>( . i^f no a»l\an(a«;0 to (?«va( Britain, aiul wo\iKi fjo far 
to }M\>vo, what, milt^oil. stHMWs by many tv^ ho hohovoil. that 
th<* sv>ontM' \\\c »>onno\ion l>(^(woon (h«Mn is ^hss»^^vo^^ (ho 
hot tor, 

nisson(inii as I iK>. fi\MU (lio t^pimons of (hoso (hoorists. 
i( app«vu\\l to mo. that (ho \\v>rk I ha^l nnil<MMakon ro»|uirtHl 
n\o (o s(ato somo o( tho roasons on whiol\ I ^i\mnti<>il (his 
vlissont. anvi (hat. wi(h»Mit on(tM"ini^ a( lonj^di in(o any o( 
(h«^ imjv>r(;u\t quostions m\v>l\o»l in th<^ Jisoussion. I shoiiKI 
ho ahio ;»( U\>s( (o oas( a sha»h^ o( il»nih( ovtM' vliHMnuos 
a.»<sor(«Ml wi(h ijiViU iJoii'iuatisin, ami aototl on w i(l\ vmhosit^Uimj; 
<>M\(ulono»\ In <Mni»\avvM'in^\ hv>wo\or, l\>v (his pur^nvso, (v> 
avrrtnii"x^ a soritvs of arvi~mnoi\(s »li'awn f»\Mu a ^u^M^i(ioa(iv>n 
of prinoipUvs (hrt( *>rijiinally snii^i^vstotl (homsolvovs to nu* 
w hon onji~aii>Hl in n\vu>^ onlar^vii inqniritvs. w^y work ii'miiually 
}Wssun\tHl a far inoiv o\(oniio\l aiul sys(on\a(io fiMiu, (han I had 
a( (irst movlita(<\l ; anil I ht\".amo oni^ai^o*! m tho prosont 
at(tMnp(, to shiw\ that (horo o\is( i^ioa( aiul raiiioal orixus m 



AfrnfOK'H PREIACK xlix 

l,li<-, v/lioN; ;iyf)t,<;fn, ;iiinif:i<-,fif, t,o vitia.f,*; v<-.ry many of the 
r;oricliiHionH drawn frofn it, and from tho fallacicB intro- 
dijc';d by wfiirfi, tfi'-, (\()cXnn<::i of fr<-,f; trad<; alon^, <\cx\y(: their 
|jla(iHif>iht,y . 

In tfi'-. proHocution of th<; arj.ojmerit, I have almoHt entirely 
eonlin'-.d f/iy'',elf to thr; r:r>nHideration of the. AocXnncM to 
whK:li I ;),m fj(>f;oH(-.d , an th';y a.re developer] in \,\t(- Wrjill.k 
of NidvmH. I 'oul'l not have done otfjerwine, without 
\n;(\<)it\\r\i^ ifivol7<-d in the dineuHKion of eontradietory and 
cowiWcXiUf^ o[wnionH. N'either, an I oonr;*:) -/<•,, iw this limita- 
tion of (;HH<;nti;).l inif>ort!i,nr;r; tr^ the detf^rrriination of the 
(jointii in debate. If Aflarri Smith he eHHentially wronj/, none 
of hi;; followers can b^; rij(ht. The HyHtem eBtabliahed by 
him Htandw, or falln, with hire. 

I am not i^oiora.nt of the da.n^;e^', to v^/hich Huh attf:rnpt 
HubjectH nit;. Who'^ver yentiin;H to a.ttack a flyHtern reeeived 
HO f//-fi<;rii.\\y, and Hijpfjort(;d by ho j.^reat a wei^^fit of authority, 
Ih <;XfK)Bed trj variouH <;vilH. '^rhf.y who have f^rnbraeerl itn 
fjririfapl'H a,f<; apt to ;;li^dit and iu-.ijU-jX, or, if that may not 
\t<:, to coru-cAVi; it their buBineHH to ovr^rtfirow thfj fieterodox 
doetrineH. What of error thr^y may eontain in eagerly Heized 
<*n , wha.t of truth, i:; r,v'-,rlo'>kc.f] . " Who," askfl Mr. Locke,, 
" iH tfierf;, ha.rdy f;nour(h tf> (■.(>iiU;n(\ witli the n-proaeh which 
in ever f)rr;)'>arr;d for him, who darr-.n vf;nture to dinH'-.nt frr^rn 
the n-,e'-,iv'-,d of^inion:; of }ii:i '■ountry a.nri f^arty'.^' A/id 7/h'-,re 
Hi the ffian to be found, that can f^atiently pref;are InmHrdf 
to bear the najncH, that he is sure tf; meet v/ith, who dotfi in 
the least scruple any of the common r^pirjionHV" Thouj/fi 
many thin^fs are altered Binf:e the flayH of Locke, mankind 
a.re but little chan^jed. in his days, indeed, the prejudices 
of the tiju'H ran towards opinions, which, acquiesed in by 
fnany Huc-r;(tr;rling ^fenerations, W(trft, therefore, conceived to 
lia,ve a real fjjurality of judi.^ments in th^-ir favor. Now, on 
the (^jntrary, U, have been believed from of old, is deerrjed 
to indicate delect, and that alone is admittr;fi as of approved 
Htrf;n^^fch, which has not ber;n subjer;tr;d to the test of time. 
In this, nevertheless, there is a perfect agreement, that men 
a,pf;(;al not SO much to truth itself, as to prevalent opinion, 
and a,re disposed to treat whatever stands opposed to it, as. 



i AUTHOR'S PREFACE 

necessarily erroneous. It were, then, in vain for me, I am 
aware, in reply to the charge of presumption in challenging 
the opinions to which the celebrated author of the Wealth 
of Nations has given currency, to answer, that it is not so, 
and that, on the contrary, "he is the general challenger :" 
that his disciples form, in reality, but a sect, one setting 
itself in opposition to the belief of all preceding ages, and 
in its rise and progress presenting nothing dissimilar to the 
other numerous sects, which time, in its course, has seen 
appearing and disappearing : that, therefore, if we really 
appeal to authority, its decision is against, not for, the 
present political creed. Such arguments would certainly 
fall on deaf ears. The authority, in which men acquiesce, 
is that which is present, and to w'hich they have been 
accustomed to yield assent. Whatever is opposed to this, 
and separated from it by distance of time or space, has no 
influence on their judgments. 

But, although, instead of assistance, I have to look for 
•opposition, from this quarter, I nevertheless believe, that I 
have an auxiliary of great power on my side. In political 
questions, before they see that they are wrong, it is common 
for men to feel that they are so. The progress of recent 
events seems to have excited a general sensation of this sort 
over Great Britain. 

It is natural that these circumstances should beget a sort 
of feeling of doubt. That, without pretending to question 
the general truth of the system established by Adam Smith, 
many should yet ask themselves, is the path which he has 
pointed out, truly that which always leads directly to the 
wealth of nations ? In this temper of the public mind , I am 
inclined to hope that the application of new principles to a 
reconsideration of the whole subject, may be conceived to be 
an undertaking deserving, at least, of being examined, and 
that the defects of the following pages may not be thought 
sufficient to prevent wdiat measure of truth they may contain, 
from being perceived and appreciated. 

Montreal, 1833. 



AUTHOR'S PREFACE 



POSTSCRIPT. 



In the preceding pages, the reader has an explanation of 
the original design of the work which I venture to place 
before him ; but , in preparing it for publication in this 
country, I have made some alterations in it, the nature of 
which it is proper I should here state. 

The doctrines which Adam Smith maintained with so 
much ability, never took so deep hold in this country as in 
England, and they have been more strongly opposed. There 
is hence, a very considerable difference between the state of 
public sentiment in Great Britain and America, concerning 
the most interesting practical questions of political economy. 
This is especially the case with regard to the policy of the 
protective system. The practical bearings of that system 
on the condition of things in this republic, have been dis- 
cussed so often, and with so much ability, that probably few 
new arguments or facts concerning it can be brought forward 
by any one, least of all can they be expected from a foreigner. 
Although, therefore, I look on the effects of the policy 
pursued by the legislature of the United States, as affording 
the best practical illustration hitherto existing of the correct- 
ness of some of the principles I maintain, I have scarcely 
at all referred to them for that purpose, but have contented 
myself with showing how the benefits resulting from the 
operations of the legislature, in this and in other similar 
cases, are to be accounted for. I have thus omitted much 
matter that would have appeared, had the work been 
published in England, but which it seemed to me, would be at 
least superfluous here. These omissions occur in the third 
book, which is consequently much abridged. 

To the second book I have made some additions, having 
given fuller development to the principles there explained, 
and traced their connexion with events at greater length, 
than is necessary for the mere purpose of exposing the 
fallacies of the theoretical views, the refutation of which 



lii AUTHOR'S PREFACE 

was originally my sole design. As the additions were made 
in the progress of the work through the press, in one or two 
instances I have been led to refer to subjects to be afterwards 
treated of, which I found it impossible to comprise within 
such limits as would admit of their insertion. These 
omissions, however, do not occasion any break in the chain 
of reasoning. There are, also, some topics, which though 
I have introduced , I have but partially discussed , and merely 
so far as may serve to show some of their connexions with 
principles expounded. The most important of these is the 
subject of banking. 

Boston, 1834. 



INTRODUCTION. 

Of all the circumstances connected with the "Inquiry into the 
Wealth of Nations," there is no one more remarkable than the 
fact, that its celebrated author leaves us in doubt what he him- 
self understands by that " wealth," the nature and causes of 
which it is the object of his inquiry to investigate. His 
followers have scarce been more fortunate. They have sought, 
by definitions, to remedy the acknowledged defect, but have 
been unable to agree in the terms of them. The school is 
thus split into many little sects at variance with each other 
regarding the very elements of the science.^ 

It seems to me that this circumstance arises from, and very 
clearly marks the existence of, a great and fundamental defect 
in the principles of investigation on which Adam Smith and 
the school he founded proceeded ; — an uniform tendency to 
hold that up as an explanation of other things, which, in 
reality, is the very thing itself to be explained. 

It is the nature of wealth in the general, and the laws 
regulating its increase and diminution, that can alone, as I 
conceive, form the proper subject of philosophical investigation. 
These being determined, from them may be deduced the 
manner in which particular societies, or particular individuals, 
come to possess this or that amount of wealth. But, though 
such is the proper philosophical view of the subject, it is not 
that under which it appears to common observers. 

Before men begin to speculate, they are obliged to act. 
They are therefore first led, in regard to any system with 

^ [Rae here refers to a quotation from Lauderdale which is reproduced 
as " Note A " in the Appendix.] 

A 



2 INTRODUCTION 

which they have to do, to fix their attention altogether on the 
phenomena exhibited by it, without attempting to reach the 
causes of those phenomena. It is usually long after the events 
themselves have thus been observed and noted, that to trace 
their causes becomes the employment of philosophers. The 
mere sailor, for example, regards the winds simply as con- 
nected with the different seasons, the various regions of the 
globe, and the particular aspect of the heavens at the time. 
This makes up the sum of his knowledge concerning them, 
which, notwithstanding, may be very extensive and of great 
practical utility. It is not his object to inquire into the 
general causes producing all these phenomena, nor into the 
laws regulating the general system of things, of which they 
make a part, and so of ascertaining the true nature of the 
different winds, the real manner of their existence, and the 
measure of their force and duration. He believes that while 
that system endures as it is, his knowledge will serve to 
direct his practice, and this is all about which he concerns 
himself. An extensive practical knowledge of this sort here 
long preceded a philosophical knowledge of the subject. It 
has been the business of the latter, as it has at last had place, 
to ascertain the nature of wind itself, and the causes producing 
all the different winds, and acting on them For this purpose 
the philosopher has turned himself to the investigation of 
whatever, in the general system of things, is connected with 
that concerning which he inquires; — to the constitution and 
properties of the atmosphere ; — the effects of changes of tem- 
perature on aeriform fluids ; — the motions induced by these, 
by the rotatory movement of the globe, and by other circum- 
stances. From them he deduces the true theory of wind, and 
shows that it is in accordance with the observations and rules of 
him, who has been accustomed to view the subject in its practi- 
cal bearings alone, and tends to elucidate and simplify them. 

In a somewhat similar manner wealth was felt and noted in 
its effects long before, as a circumstance largely affecting 
societies, it was proposed philosophically to investigate its 
nature and causes. To mark those effects, " riches " and a 
series of other terms of the sort, were invented. Like all 
every-day words and phrases they apply to the obvious aspects 



INTRODUCTION 3 

of particular facts and occurrences, and have no necessary 
reference to the causes of those facts and occurrences. All 
such speculations are foreign to mere practice, and never even 
enter into the explanations and reasonings of the merely 
practical man. However complicated the social system of 
which any person engaged in the acquisition of wealth makes 
a part, he has no difficulty in tracing the manner in which 
that portion of it which he possesses has been acquired, nor in 
explaining how it forms to him a certain amount of what he 
calls capital. But in giving this explanation, it will be ob- 
served that for the elements of his statements, he has always 
recourse to the existence and continuance of certain circum- 
stances and regular trains of events in the general system of 
human society. What the things may be which give origin 
and regular succession to these events is a speculation lying 
out of his road, and on which he probably never enters. 
Though, therefore, he can easily tell how he got that which 
constitutes his wealth, and how to him it comes to be wealth, 
he will yet probably confess that he is unable to say what 
constitutes wealth in general, from whence it is derived, or 
what are the exact laws regulating its increase or diminution. 
These are questions of which the solution is very clearly shown 
to be of great difficulty from the mass of discordant opinions 
concerning them."^ 

Adam Smith, in this and in other instances, by transferring 
without hesitation, terms made use of to mark and explain the 
affairs of common life, to denote the great phenomena which 
the affairs of societies present, falls, as it seems to me, into 
two errors. In the first place, he in a great measure misses 
that which is the real object at which his inquiry aims, the 
investigation of the true nature and causes of national wealth, 
and shows, by holding out sometimes one notion of it and 
sometimes another, according to the different lights in which 
at different times the subject presents itself to him, that he 
has no very definite ideas concerning it. In the second place, 
he naturally, and in very many instances, falls into the error 
of taking, what in truth are the results of general laws 
governing the course of this class of events for the laws them- 

1 [See " Note B " of the Appendix.] 



4 INTRODUCTION 

selves, and so of elevating effects into causes. His procedure 
is not very dissimilar to what that of a philosopher would have 
been, who, desiring to investigate the nature of wind, should 
have assumed it as already known, not as an event, but as a 
thing, and should have conceived it his business merely to con- 
nect and arrange the various phenomena in relation to it, 
with which practice had previously made mankind familiar. 
Such a system could not have failed to have embodied great 
radical defects, for it would have been built on principles 
fundamentally erroneous. 

His followers, by the use they make of definitions, appear 
to me rather to have introduced new evils, than to have 
applied a remedy to those already existing. Definitions give ] 
us the mastery of words, not of things,^ and therefore by taking 
them as they have done, for principles of investigation, not 
auxiliaries to it, their labors have generally issued in adducing 
arguments instead of collecting and arranging facts, the former 
being the proper fruit of an attention to words, the latter of 
an inquiry into the nature of things. 

I conceive that the fallacies of the particular doctrines I 
oppose, may be most effectually exposed by tracing out the 
true nature of that wealth, the manner of the augmentation 
and diminution of which forms the subject of controversy ; 
that we can neither assume this as a thing already known, 
nor hope, by any mere intellectual effort, to comprehend it in 
an ingenious definition ; that when it is really discovered, it . 
must be, as has happened in other things, that disputes 
concerning its manner of existence, its increase and decrease, 
will terminate, or, instead of hinging on plausible arguments, 
may be settled by a reference to ascertainable facts. It is, 
therefore, such an investigation, that I propose partially to 
attempt ; and it is chiefly on the results of it, that I mean 

^ A sailor would never think it necessary to explain what wind is. Were he 
asked to do so, it is very probable he would answer " that which blows," and 
this would be a correct enough marking out of the meaning attached to the 
word. Mr. Say, in like manner, defines value as what a thing is worth. 
" Valeur des choses. C'est ce qu'une chose vaut." Kiches, again, he defines 
an amount of values. " Richesse, c'est la somme des valeurs." Capital, 
an accumulation of values. Vide Epitome des pri)icipes fondamentaux de 
I'economie politique. 



INTRODUCTION 5 

to rest my demonstration of the reality of those errors, the 
conviction of the existence of which has been my motive for 
engaging in the present undertaking. 

Dugald Stewart prefaces the observations he makes on 
Adam Smith's great work, with the following remarks : "An 
historical review of the different forms under which human 
affairs have appeared in different ages and nations, naturally 
suggests the question, whether the experience of former times 
may not now furnish some general principles to enlighten and 
direct the policy of future legislators ? The discussion, how- 
ever, to which this question leads, is of singular difficulty ; 
as it requires an accurate analysis of by far the most com- 
plicated class of phenomena that can possibly engage our 
attention, those which result from the intricate and often 
the imperceptible mechanism of political society ; — a subject of 
observation which seems, at first view, so little commensurate 
to our faculties, that it has been generally regarded with 
the same passive emotions of wonder and submission with 
which, in the material world, we survey the effects produced 
by the mysterious and uncontrollable operation of physical 
causes." ^ The science of Political Economy he considers as a 
part of this great subject. 

If the accuracy of these observations be admitted, as I 
think it must, the inquiries in which Political Economy 
engages, lead to the investigation of the general principles 
of human action, and it is to be considered but as a branch of 
a larger science, having for its object, to trace the laws to 
which man is subject as a moral and intellectual animal, acted 
on by the system of things existing in the world, and acting 
in turn on them ; to explain from those laws the events which 
his past history, as far as known, exhibits ; and to collect 
the means of ascertaining what will be the future course 
of it. While to be able clearly to unfold the laws regulating 
the events with which it deals would imply the capacity 
of tracing those regulating the whole system of phenomena 
of which man is the centre, just as to explain with accuracy 
the laws regulating the motions of one of the heavenly bodies, 

^ Life of Smith. 



6 INTRODUCTION 

implies the knowledge of principles capable of disclosing the 
prescribed movements of them all. 

I have already observed, that the subject first met me when 
engaged in the investigation of some principles which I con- 
ceived might in time assume a form capable of a general 
application of the sort. To attempt here an extensive 
generalization of this kind would be out of place, and is 
impracticable, because of necessity only a small portion of 
the phenomena are before us. Political Economy itself makes 
but a part of the subject to which such generalizations belong, 
and it is only one division of political economy of which 
we are to treat. It has usually been discussed under the 
heads of stock, wages of labor, and rent, and it is to the first 
of these that our investigations are to be altogether confined. 
It is only therefore in such parts of the subject as present 
a sufficient mass of phenomena, to warrant the procedure, that 
I shall attempt to introduce any very general principles. In 
other cases I will confine myself to the simple statement of 
facts admitted by all parties. 



CHAPTER L 

OF ECONOMIC AMBITION AND THE MEANS ESSENTIAL 
TO ITS EEALIZATION. 

Cicero gives the following summary of the principles exciting 
man to action, and of the mode in which thej lead him to 

act : " inter hominem et beluam hoc maxime interest, 

quod haec tantum, quantum sensu movetur, ad id solum, 
quod adest, quodque prgesens est, se accommodat, paullulum 
admodum sentiens prseteritum, aut futurum. Homo autem, 
quod rationis est particeps, per quam consequentia cernit, 
causas rerum videt, earumque progressus, et quasi anteces- 
siones non ignorat, similitudines comparat, et rebus praesentibus 
adjungit atque annectit futuras : facile totius vitse cursum 
videt, ad eamque degendam praeparet res necessarias. Eademque 
natura vi rationis hominem conciliat homini et ad orationis, 
et ad vitce societatem : ingeneratque in primis praecipuum 
quendam amorem in eos, qui procreati sunt : impellitque ut 
hominum coetus, et celebrationes, esse, et a se obiri velit : ob 
easque causas studeat parare ea, quae suppeditent et ad cultum, 
et ad victum : nee sibi soli, sed conjugi, liberis, ceterisque, quos 
caros habeat, tuerique debeat." 

" The chief distinction between man and the inferior animals 
consists in this. They are moved only by the immediate im- 
pressions of sense, and, as its impulses prompt, seek to gratify 
them from the objects before them, scarce regarding the future, 
or endeavoring from the experience of the past to provide 
against what is to come. Man again, as he is endowed with 
reason, by which he is able to connect effects with their causes. 



8 OF ECONOMIC AMBITION 

to perceive the principles which guide the progress of affairs, 
and to join together the present and the future, easily discerns 
the course of his whole life and prepares whatever may be 
necessary for passing it in comfort. The same intellectual 
powers also, which nature has bestowed on him, give scope to 
his affections, and join him to his fellows by the ties that 
spring from language and the connexions of social life. It 
is from this source that we must trace his peculiar provident 
love for his offspring, his concern for the interests of society, 
and his desire to mingle in its business and pleasures. 

" From these principles it is that man is incited and enabled 
to provide beforehand whatever may be requisite both for 
utility and ornament, not only to himself but to his wife, his 
children, and all others who may be dear to him, or whom it 
may be his duty to protect." 

It is unquestionably the capacity for perceiving, and retain- 
ing in his mind, the course of events and the connexion of one 
with another, that leads man to perceive what advancing 
futurity is to bring forth, and enables him to provide for its 
wants. This provident forethought distinguishes him from the 
inferior animals, and the degree in which he possesses it marks 
his rank in the scale of civilization.-^ 

When he has gained any knowledge of the nature of things 
[the operations of nature] around him, he finds many that 
satisfy more or less perfectly his present wants. He knows, 
also, that if he live to see the future he will then have similar 
wants and desires. Some of the occurrences satisfying his 
desires and wants exist abundantly ; others, sparingly or im- 
perfectly. If he regard the future, he must wish that those 
occurrences of which he now can only obtain enough to 
satisfy his wants sparingly and imperfectly, should exist then, 
so as that he might be able to obtain them to satisfy those 
wants abundantly and perfectly. 

His faculties of observation and reason generally give him 

'[In contrast to the animals " man has thoughts far-reaching, he has con- 
certed and long-extended plans." (Fragment of Rae's MS.) The animals, 
indeed (notably ants, bees, and the like), exhibit a certain degree of "provi- 
dent forethought ; " but it is non-progressive. Man is characterized specifically 
by ever-expanding wants, and hence by ever-expanding undertakings to 
satisfy them.] 



OE ECONOMIC AMBITION 9 

the power of effecting this. For the objects affording satis- 
faction of his desire are mere arrangements of matter. 
His faculties of observation show him their nature, and the 
manner in which the train of events going on amongst 
them succeed each other. He perceives that the occurrences 
which are the means of satisfaction of his present wants, 
or which were of those he felt a little time since, and 
which will probably be of those he will feel in future, are 
either the immediate result of the nature and form of some 
things around him, or of the trains of events which, in 
consequence of that form and nature, are taking place among 
them. He cannot alter the nature of things, but in many 
cases, he is able to change their form, that is, the particular 
arrangement of the matter of which they are formed ; and 
his reason instructs him, that if by doing this, he can so 
alter the trains of events proceeding from them or depending 
on them, that they may either form, or cause to be formed, or 
put in his possession, objects fitted to supply more perfectly or 
abundaiitly what probably will be his future wants, than 
any objects that would otherwise exist, he then is able to 
provide for the future. This in many cases he can do, and 
thus he acts. 

A North American Indian in his canoe comes to an island 
in some lake or river, and finds near it a good station for 
fishing. He therefore determines to remain there for the 
fishing season. Towards evening he paddles his canoe to 
shore, lands, kindles a fire near a large tree, wraps his 
blanket about him, places his feet to the fire, his head to 
the trunk of the tree, and thus prepares for repose. In so 
doing, with the exception of kindling the fire, he takes 
advantage simply of his knowledge of the nature of the 
things around him, and seeks from them the best supply 
they can give him of what he wants, that is, of shelter 
from wind and weather. 

It rains and blows during the night, the tree shelters 
him somewhat, but still he gets cold and wet. In the morn- 
ing he spends some hours providing a better shelter against 
the inclemency of any such night in future. Of branches and 
bark he makes something like one half of the roof of a house. 



10 OF ECONOMIC AMBITION 

only much smaller, the open side being towards the south and 
the fire, the sloping side towards the north from whence comes 
cold and rain. Thus, though he cannot prevent the wind from 
blowing, or the rain from falling, his knowledge of the manner 
in which the trains of events forming these phenomena succeed 
each other, or if you will, his knowledge of the laws which 
regulate their motions, instruct him so to direct them, that 
the one shall not blow, or the other fall, on a particular spot, 
which he knows he may at some future time wish to remain 
calm and dry. This time may be distant, for it may not rain 
or blow so as to inconvinience him for a week or two, never- 
theless to provide against it he gives a good many hours 
present labor. 

Next evening, before going to repose, he finds the turf damp 
from the rain of the former night. He looks for an elm tree, 
cuts off a piece of its strong thick bark large enough for him 
to sleep on, covers it with the soft branches and leaves of the 
white pine, and forms a dry and soft bed for himself. Thus 
his knowledge of the materials around him enables him to 
form what he wants, a dry and soft place of repose. 

In this island he discovers a small wild plumb tree, he 
relishes the fruit, but there is little of it. Eesolving to return 
in succeeding seasons he lops the branches of the surrounding 
trees to give this room to spread, and expects thus to find next 
year a more abundant crop.^ Here his knowledge of the 
manner in which trees and fruit grow and thrive, or his 
knowledge of the order of tlie trains of events which termi- 
nate in the full development of the tree and abundance of its 
fruit, enables him so to work on the matters around him, as to 
occasion them to produce more abundantly next season, than 
they have this, what then he will desire. 

He thinks not of providing for any future want the means 
to supply which, will, without this, exist in sufficient abun- 
dance. Thus water, in such a situation, he knows he will 
always be surrounded with. Were the same Indian encamped 
in the woods, by a very scanty spring, he would dam it up, 

^ This is a possible supposition, but it is more probable he would neglect it, 
perhaps cut it down for the sake of reaching more easily the fruit it carried. 



OF ECONOMIC AMBITION 11 

and cover it with branches so as to keep cool a quantity 
of water for his future occasions. 

The proceedings of man are everywhere similar. He has 
always an end in view, he employs means to effect this end, 
and there is a manner through which he effects it. The end is 
a supply for future wants ; the means, the bringing about ! 
of such events as may serve to supply them ; the manner, ; 
a knowledge of the qualities with which nature has endowed/ 
the materials within his reach, of the series of events in conse-^ 
quence arising among them, and an application of this know- / 
ledge to produce, through his corporeal powers, such an ] 
arrangement of these materials, as may so change the issues of j 
events that would otherwise have place, as to bring about ) 
those which he desires. It is true, that, in most instances, 
men simply copy the proceedings of others, and think not 
of the principles on which they conduct their operations, 
nor of the observations from which these must originally 
have been deduced. But, though the knowledge thus acquired 
from this storing of observations, and deduction of principles 
from them, is not the mode in which individual men operate, ^ 
it is the mode in which the operations they carry on must / 
have been first brought into practice, and on which they j 
are all founded. ) 

We may easily satisfy ourselves of this, by turning our 
attention to the manner in which any of the articles we 
use for the supply of our wants has been formed. Bread 
may be an example. A farmer, some two years ago, made 
choice of a particular field for the cultivation of wheat. 
Had he been asked why he did so, he could have stated 
the different circumstances in the soil, and the previous 
crops that it had carried, which had thus determined him. 
By ploughing and harrowing it a sufficient number of times, 
he thoroughly broke, and pulverized the land. This he did, 
because he knew, from observations he or others had made, 
that in this state the seed he intended to deposit there would 
when it came to germinate, more easily spread its roots around 
and draw nourishment from among the particles of earth 
amidst which it would grow. He allowed a considerable time 
to elapse between the several operations, that the weeds might 



12 OF ECONOMIC AMBITION 

have time to spring up and be destroyed. Thus he knew they 
would be prevented from afterwards injuring the growth of 
the crop. He also spread over the field, and covered in, a 
quantity of manure, because experience had taught that 
this substance gives vigor to vegetation. He then sowed the 
seed, in the mode, and quantity, and at the time, which obser- 
vation had instructed him was the best, covered it with a 
harrow, and waited the harvest. When he perceived the 
grain sufficiently ripe, he cut it down with an iron hook 
having a form and edge which experience had ascertained 
to be best adapted for this purpose, made it into bundles, 
exposed them to the sun and air so that they might be dried, 
when this was effected, conveyed them to his barn and stored 
them there. Having lain there some time, the grain was 
separated from the straw by the process of threshing, it 
was then carried to the granary, where, having been kept 
for a longer or shorter period, it was thence taken to the 
mill, and, by a very ingenious process, reduced to small 
particles, and then separated by another process into three 
parts, of which the finest part, the interior of the grain called 
flour, being packed in sacks or barrels, was preserved for use. 
A certain portion of this, mixed with a particular ferment, 
wrought with the hand and exposed to the action of fire, 
became bread. 

It is very evident, that all the steps of these various pro- 
cesses depend on a knowledge of the course of natural events, 
and are regulated by that knowledge. A long series of 
■observations of this sort, and of reasonings deduced from 
,them, could alone have enabled the farmer to prepare the 
ground properly for the seed, or, after the grain had come 
to maturity, to preserve it, to separate it from the straw, 
and fit it for being converted into flour. The observations 
on the trains of events connected with the production of this 
grain that have been committed to writing, fill many large 
volumes, and besides these, every farmer is obliged to have 
a great store of his own, to guide him in his proceedings. 
Thus, in the single process of cutting down and storing up 
this crop, his success in securing it uninjureil depends on 
observing and noting well a great variety of particulars. 



OF ECONOMIC AMBITION 13 

He observes the plant carefully, and discovers, from the 
appearance of every part, from the dryness of the stem, the 
droopmg of the ears, the fulness of the grain, if it be in a 
proper state to cut down. If he make any error in this, he 
will either have unripe, and therefore shrivelled and light 
grain, or he will lose great part of it by its being shaken off 
the stem in harvesting it. Next, before he determine on 
commencing the operation, he regards the aspect of the sky, 
watches the rising and setting sun, notes the color of the 
air, the appearance of the clouds, the direction of the wind, 
the dew on the grass, and perhaps has recourse to that delicate 
instrument, the fruit of so many ingenious observations, the 
barometer. By means of all these, he is enabled to draw 
tolerably correct conclusions, in regard to the probable state 
of the weather for some succeeding days. This knowledge 
influences greatly his farther operations ; for experience has 
taught him that the injury which severe rains, coming on the 
grain when newly reaped, would occasion, is very great. If, 
therefore, the weather promise to be fine, he will commence 
cutting it down a few days sooner than he otherwise would ; 
if rain threaten he will wait a few days longer. When he 
has it reaped he gets it tied into bundles, which are put up 
in small parcels, and so disposed, that the wind may penetrate 
through them, and the rain be as much thrown off from 
them as possible, and thus the plant may have the best 
chance of being securely and quickly dried. 

This drying is watched with care, and, when it is judged to 
be sufficiently advanced, the crop is transported to the barn, 
there to wait till the proper period of threshing it out arrives. 
All these processes are, it is evident, governed by rules drawn 
from assiduous and long continued observation, and their 
success depends on its extent and accuracy. 

Were we to examine the manner in which all the articles 
that we provide for the supply of future wants are produced, 
we should find that they depend, in this way, on observations 
on the covirse of events, and on reasonings founded on these 
observations. Were proof wanting of this, we might turn at 
hazard to any complete treatise on any art. On examining 
it, we would invariably find it to contain a set of observations. 



14 OF ECONOMIC AMBITION 

the result of experience, and of reasonings, and rules, drawn 
from these observations. 

Since then man provides a supply for his future wants by 
his reason directing his industry, through means of his know- 
ledge of the course of events, to effect such changes in the 
form or arrangement of the parts of material objects, that 
these may produce articles fitted to afford this supply, it 
were desirable to have some common name to denote all the 
changes, which, for this purpose, he so makes. On this 
account I propose to give the denomination of instruments 
to all those changes that, for this purpose are made in the 
form or arrangement of the parts of material objects.^ 

The term instrument is, in general, properly enough em- 
ployed, to denote any means for the attainment of some end. 
In common use, however, and as applied to material things, 
it seems to be restricted to such arrangements of matter as 
owe their chief efficacy to what are called the mechanic 
powers. Thus a lever or a wedge is an instrument, the 
manner in which each of them operate being chiefly explained 
on mathematical principles. A spade, which is a combination 
of the two, is also an instrument. The tools which carpenters 
use are instruments. We speak in the same way of in- 
struments of husbandry, meaning by the phrase the articles 
used in that art, whose properties may be explained on 
mechanical principles. 

In all these cases, however, other principles than those which 
are merely mathematical must enter into our calculations. In 
the simplest lever we have not only the properties of a mathe- 
matical line to consider, but also, the weight and strength of 
the substance used, and these make the difficulty in the proper 
application of such an instrument, A wedge operates in many 
ways, besides those that may be considered to be derived 
simply from mathematical principles ; as for instance in the 
percussion, which it receives and communicates, and through 

^[Our author does not express himself well here. Eae's idea is that he 
proposes to give the denomination of in>itrumental production to all those 
changes in materials which man makes in the pursuit of his economic ends. 
The instruments themselves are not the "changes," but the immediate result 
of them.] 



OF ECONOMIC AMBITION 15 

means of which, if skilfully applied, the most solid rocks may 
be rent. The farther we recede from such simple instruments, 
the more extensive do we find the action of properties, which 
could only be ascertained by a long series of observations. It 
would be impossible, for instance, to give any a priori rules 
for the construction of that most useful instrument the plough. 
It is, no doubt, a wedge, but the particular form giving the 
greatest efficacy to it, is a point of very difficult determination, 
not yet, perhaps, fully ascertained. It is accurate observation 
that has guided the construction of it, to its present efficiency, 
and which may be expected to render it still more perfect. 

Were we to enter into an examination of more complicated 
machines or instruments, such as the steam engine, or the 
cotton mill, the observation would apply with double force, 
these generally deriving their efficiency from principles, that 
have been the result of very extensive and accurate investiga- 
tions of many series of events. In thus using the term, there- 
fore, we shall rather deviate somewhat from common usage, 
than be opposed to it ; and in doing so, our reasonings will only 
be subject to an inconvenience, to which all general reasonings 
must be subject, and which may be the more readily excused, 
as this use of the term may be defended from its derivation, 
its occasional acceptation, and the authority of authors of 
respectability.-^ 

In general then, all those changes which man makes, in the 
form or arrangements of the parts of material objects, for the 

^ Outils ou instrumens de mitier. Jamais mot n'a recu une acception plus 
etendue que celle que je voudrais donner ici au terme d'outils, car je desirerais 
y comprendre depuis la fronde dont se sert le chasseur sauvage jusqu'a la 
machine la plus vaste, jusqu'au mecanisme le plus complique, jusqu'aux Stres 
animus memes qui facilitent le travail de I'homme. L'enclume du forgeron et 
le metier pour faire des has, les aiguilles de la lingere et les pompes k feu, les 
navires et les betes de somme et de trait ; en un mot, tout produit materiel de 
la nature et du travail, tout objet vivant ou inanim6 que riiomme emploie 
pour s'aider dans son travail industriel, voila ce que j'appelle outils, instrumens 
de metier. Ce mot, dans son sens le plus etendu, n'exclut que les construc- 
tion."* ^CorcA, Vol. I. p. 231. 



* " Pourquoi les exclure ? Les constructions sont des produits de I'industrie 
humaine consacr^s a la reproduction ; partant ce sont des outils. Un champ 
lui-meme est un outil qui ne differe des autres qu'en ce qu'il n'est point un 
produit de I'industrie, mais un don de la natux^e." J.-B. Say. 



16 OF ECONOMIC AMBITION 

purpose of supplying his future wants, and which derive their 
power of doing this from his knowledge of the course of events, 
and the changes which his labor, guided by his reason, is hence 
enabled to make in the issue of these events, may be termed 
instruments.^ 

In this sense a field [fitted for use] is an instrument. The 
changes effected in the matters of which it, [considered as mere 
land,] is composed, for the purpose of rendering it an instru- 
ment, are the levelling and if necessary making the surface 
dry by means of ditches and drains, the removing stones 
from it, the mixing and pulverizing the soil by the plough, the 
harrow, and the roller, and the incorporating with it various 
matters termed manures, which render it more fit for the 
support of vegetable life. The future wants, towards the 
supply of which it is an instrument, are food and clothing. 
The power which has made it an instrument, is the agri- 
culturist's labor, directed by his knowledge of the nature of 
plants and soils. The change made in the consequent issue of 
events, is the abundant growth of species of plants different 
from those originally produced by it, and conducing to the 
supply of food and clothing ; or, more generally, the conversion 
of various vegetable matters of the soil, and gaseous matters in 
the air, into the substance of particular plants. The wheat 
grown on this field is an instrument. The changes effected in 
it, are its having been separated from the straw by the process 
of threshing, and its having been made sufficiently dry by 
keeping and exposure to air, to be fit to manufacture into 
flour. The want it tends to supply is nourishment, by afford- 
ing bran for the support of some of the inferior animals, as 
hogs or cattle, afterwards to be slaughtered, and flour for the 
use of man. The power is also the art and industry of the 
agriculturist. The change in the issue of events consists in 
the grain being ready for the manufacture of flour, instead of 
having been left to rot on the ground, to be consumed by 
vermin, or destroyed by the access of damp or by the want of 
air. Flour also is an instrument. The changes that have 
been effected in it are its having been separated from the 
wheat, and reduced to a fine powdery matter. The want it 

1 [More properly, may be termed the formation and use of instruments.] 



OF ECONOMIC AMBITION 17 

tends to supply is food by the bread produced from it. The 
power, which has operated on it, is the art and industry of the 
miller. The change in the issue of events thereby produced is 
the existence of flour and bran, instead of wheat. Bread, until 
such time as it is in process of consumption, is an instrument. 
The change which it has undergone is that induced by the pro- 
cesses of kneading, fermenting, and baking. The want it 
supplies is food. The power which has operated on it is the 
art and industry of the baker. The change on the issue of 
events thereby produced is the existence of bread instead of 
flour. 

Though it may seem strange to rank all these in one class, 
that of instruments, nevertheless, the doing so is rather un- 
usual than improper. They are all means towards the attain- 
ment of an end, and, for the attainment of this end, that is, 
the production of bread, do they alone exist. The blade as it 
springs from the soil, and the [prepared] soil on which it grows, 
form together an instrument for this end ; the plant when it 
has extracted all the nourishment from the soil which that can 
give, and is ripe on the ground, is an instrument ; when it is 
cut and put up sheltered from the weather, it is still an in- 
strument ; so is the grain when separated from it ; so it is 
when ground in the mill ; so it is when in loaves, put apart 
for consumption, until the moment arrives when it is consumed. 
It is impossible, if we call it at first an instrument, to point 
out when it ceases to be so, until the moment when it is 
actually consuming. 

All tools and machines are instruments. Thus a carpenter's 
saw is an instrument. The changes effected in the matters of 
which it is composed, for the purpose of rendering it an 
instrument, are, there having been given a fit form and temper 
to the steel plate of which it is made, and a handle having 
been adjusted to it. The wants which it tends to supply are 
multifarious, according to the uses to which it is put. The 
power that renders it an instrument is the art and industry of 
him who makes, and of him who uses it. The changes effected 
in the issue of events by its fabrication and use, are the divid- 
ing into regular parts suited to different purposes, a great 
number of pieces of timber. 



18 OF ECONOMIC AMBITION 

In a similar manner it might be shown, that houses, ships, 
cattle, gardens, household furniture, manufactories, manufactured 
goods, and stores of all sorts are in this sense, instruments. 
But it is, I apprehend, unnecessary further to multiply in- 
stances ; every thing that man, for the purpose of gaining an 
end, brings to exist, or alters in its form, its position, or in the 
arrangement of its parts, is an instrument. 

As man is thus enabled to provide for the wants of fiiturity, 
by his knowledge of the course of events, it naturally follows, 
that in any particular situation, his power to provide for them, 
is measured by the extent and accuracy of his knowledge. If 
that knowledge be diminished, his power will be diminished. 
Thus a deficiency of skill in the art of agriculture, or of 
baking, will alike occasion a diminution of the quantity of 
food to be got from a field applied to the cultivation of wheat. 
Neither can his power be increased, but by an increase of his 
knowledge. It is impossible to point out any improvement in 
any art, which does not depend on some new observations, or 
reasonings, on the course of events connected with that art. 

The generally admitted axiom, that knowledge is power, 
may not be strictly true. Many facts have been observed 
which have not yet been applied to any useful purpose, though 
it is probable they will, in time, be so applied. But, though it 
may not be strictly true, that all knowledge immediately gives 
power, it is so, that all power springs from knowledge, and is 
measured by its extent and accuracy. Neither can it be dis- 
puted, that it operates by enabling man's reasoning faculties, 
so to direct his industry, as to induce certain changes in the 
form and arrangement of the parts of material objects con- 
verting them into instruments, " Ad opera nil aliud potest 
homo, quam ut corpora naturalia admoveat et amoveat ; 
reliqua natura intus transigit." 

[Rae's language in the last few pages is not wholly consistent with his 
general teaching. The "want " which bread supplies is not properly speaking 
" food " (that is really only another name for bread), but the pleasure of eating 
and the sense of being nourished. These last are the artifically produced 
" events " which are the final goal of the long series of adaptations of means 
to ends. Not until bread has been eaten does it cease to be a part of that 
great and complicated mass of apparatus which Rae calls instruments, and 
which are usually known as economic goods.] 



CHAPTER 11. 

OF THE CIRCUMSTANCES COMMON TO ALL INSTRUMENTS, 
AND OF THOSE PROPER TO SOME. 

All instruments agree in the following three particulars ; 

1. They are all either directly formed by human labor, or 
indirectly through the aid of other instruments themselves 
formed by human labor. 

Sometimes, though rarely, instruments are constructed by 
labor alone. Thus occasionally rough stone fences are put up, 
by the hand alone, without the intervention of even a single 
tool. But, in most instances, the aid of other instruments is 
employed. It is seldom, that even the most common laborer 
is not assisted in his operations by some implement or another. 
But, whatever instrument or instruments may have cooperated 
with labor in the formation of any other instrument, they 
themselves have been either altogether, or in part, formed by 
labor; and, by retracing the course of things farther and 
farther back, we inevitably come to the conclusion, that labor 
was, in this sense, " the first price, the original purchase money 
that was paid for all things," and thus that, directly or in- 
directly, it is to be looked on as the agent that gives form to 
every instrument.-^ 

^ [Rae is here dealing with a restricted aspect of the larger problem. He is 
perfectly aware, as the context indicates and as he shows more fully elsewhere 
that the universal cost of getting wants supplied is labor (mental and physical) 
together with waiting and the running of risk, — three elements which are 
present in every stage of the total process of production, in the formation of 
instruments as well as in the utilization of them. But here, where he deals 



20 GENERAL PROPERTIES OF INSTRUMENTS 

For the sake of simplifying the succeeding spec\ilations, as 
much as may be, hxbor will be considered as the agent em- 
ployed in the formation of all instruments. When the co- 
operation of other instruments is implied in the means by 
which any particular instrument is constructed, the degree in 
which they cooperate is understood to be measured by the 
quantity of labor for which their cooperation is, or might be, 
procured ; and, in this sense, that cooperation is spoken of as 
an equivalent to labor. The rules, according to which the one 
thus measures the other, will be discussed subsequently. 

2. All instruments bring to pass, or tend, or help, to bring 
to pass events supplying some of the wants of man, and are 
then exhausted. 

Some instruments once formed, without the further inter- 
vention either of labor or of other instruments, produce events 
which directly supply our wants. Thus a peach tree yields its 
fruit to our hand. The operation of others only tends to the 
production of events supplying our wants. The growth of a 
crop of wheat is only a step towards the production of bread. 
Others require the help of either labor, or some other instru- 
ment. A row boat is useless without the labor of the man 
who plies the oar ; a carriage, without the cooperation of the 
horses who draw it. All instruments, however, either produce, 
or contribute to the p^'oduction, of events supplying some of 
our wants. Their power to produce such events, or the 
amount of them that they do produce, may be termed their 
capacity} 

It is necessary to have some common measure for the 

only with the formation of instruments, for tlie sake of convonieuoe, he leaves 
waiting and risk-takitig out of account. He assumes for the purpose of getting 
the basis for a certain method of comparison of instruments in general, that 
instruments are all formed at one moment of time and tiiat the technical and 
mercantile outcome of their formation is certain.] 

^[The technical expression "capacity" of instruments is used by Rae here 
and elsewhere ambiguously. There is a decided difference between the 
" power to produce " or to further the production, of certain desirable events, 
that Is, tlie initial capacity or yielding-power or productivity of a thing ; and 
the whole "amount" of such events actually yielded during the life of an 
instrument, that is, its total output, its total capacity. Sometimes Rae means 
one, sometimes the other ; but as a rule the latter. See Chapter V.] 



GENERAL PROPERTIES OF INSTRUMENTS 21 

purpose of comparing the capacity of instruments or the 
returns that are made by them, with the labor or its equiva- 
lents that went to form them. For this purpose, also, labor 
will be adopted, and the events brought to pass by any instru- 
ment will be estimated by the amount of labor to which they 
are esteemed equivalent by the owner of the instrument. As 
we proceed, it will appear, that this use of the term has no 
other effect than that of giving distinctness to our nomen- 
clature. Besides, it often really happens, that the returns 
made by instruments directly compare with labor, because they 
directly save labor. For instance, wooden or metal pipes are 
occasionally used to conduct water from a spring to some 
dwelling-house. Were they not there, the water would have 
to be carried within the dwelling by some of the domestics, 
and therefore the instrument formed by the pipes may be said 
indifferently, either to supply a certain amount of water, or 
save a certain portion of labor. 

With one considerable exception, afterwards to be noted, all 
instruments at length bring to pass, or aid in bringing to pass, 
all the events which they can bring, or can help to bring to 
pass. I shall use the term exhaustion, to denote this passage 
of things from the class of instruments, into things which are 
not instruments. When an instrument is said to be exhausted, 
it is meant that the matters of which it was composed have 
passed out of the class of instruments into that of materials. 

Sometimes they pass from the one class to the other 
suddenly. Thus, articles used for food and fuel, bring to 
pass all the events for which they were formed, very shortly. 
The appetite of hunger is gratified, and heat is communicated 
to the frame, in a few minutes, and the faggot and the bread, 
having yielded all the nourishment and heat stored up in 
them, then cease to be instruments. Gunpowder brings 
certain events to an issue instantaneously. The bullet is 
discharged, and the rock split, in an instant. This sudden 
and complete exhaustion of the capacity of instruments is 
what is usually termed consumption. Sometimes the matters 
of which instruments are formed pass from the class of instru- 
ments to that of materials by degrees. Thus tools and articles 
of wearing apparel are in use for a long time before they cease 



22 GENERAL PROPERTIES OF INSTRUMENTS 

to be instruments. A saw may be in employment for years ; 
a hat defends the head for months. When the capacity of 
instruments is thus gradually exhausted, it is usually said that 
they are worn out, and this sort of exhaustion is termed wear. 

Sometimes the capacity of instruments is accidentally done 
away with, and they consequently pass out of the class of 
instruments, without being exhausted. Thus a house may be 
burned, cloth may be eaten by vermin. They are then said 
to be destroyed. A partial degree of this is damage. In 
calculating the capacity of instruments, it is necessary to 
reckon the risk they run of destruction or damage. In any 
estimation of the capacity, for instance, of a crop of wheat, 
we have to make as accurate an allowance as may be, for the 
risk of its destruction or damage, by the inclemency of the 
weather or other accidents, before the harvesting of it be 
accomplished.-^ 

3. Between the formation and exhaustion of instruments a 
space of time intervenes. This necessarily happens because 
all events take place in time. Sometimes that space extends 
to years, sometimes to months, occasionally to shorter periods, 
but it always exists. 

The circumstances we have hitherto assumed as common to 
all instruments, and the events they generate, will, I believe, 
on examination, be found actually to be so. There is one 
circumstance, however, which it is necessary to assume as 
common to them all, and which in reality is not altogether so. 
In comparing the capacity of two or more instruments, which 
supply, or tend to supply, wants of the same sort, we may 
very often measure them by the relative physical effects, 
resulting from the action of the events brought to pass by 



^ [It is also necessary, especially in the case of machinery, to take into 
account the risk of an instrument being superseded through new inventions. 
In every progressive industry great masses of instruments are constantly 
being throwTi on the junk heap long before they are worn out. 

But this is taking the point of view of the individual rather than that of 
society. The community gains, as regards the capacity of its instruments, 
through a rapid advance of the arts ; although individuals (particularly those 
with the least powers of adaptation) suffer pecuniary loss. Rae has in mind, 
obviously, losses which nobody gains.] 



GENERAL PROPERTIES OF INSTRUMENTS 23 

them. Thus, if the consumption of one cord of fire wood, of 
a particular sort, is capable of producing exactly double the 
heat which the consumption of another cord of another sort 
produces, a cord of the former, will have double the capacity 
of a cord of the latter, and, if the one be equivalent to four, 
the other will be equivalent to exactly two days labor. In 
the same way, a log of timber from Norway, about to be 
employed in the construction of a house, if of equal size, 
strength, and durability, with another from Prussia, may, with 
justice be considered as of equal capacity to it; and so of 
many other instruments. "We shall see afterwards, however, 
that this mode of determining the capacity of similar instru- 
ments, is in many cases incorrect, and that the instances are 
very numerous, where the relative capacities of instruments of 
the same sort, depend on other causes than their mere physical 
properties. The assumption, therefore, that they may be so 
determined, is to be considered as hypothetical, and to be 
tolerated from the difficulty of otherwise treating the subject ; 
in the same manner as the hypothetic existence of strictly 
mathematical lines, and the absence of friction and of the 
resistance of the air, is excused, in reasonings concerning the 
mechanical properties of matter. As in these reasonings, an 
attempt will be made to ascertain the extent, and mode of 
operation of those other causes ; and, having traced what seem 
to be the great moving powers, and the laws governing them, 
we shall endeavor to discover the circumstances which retard 
or derange their motions. 

It may be proper here to notice the acceptation, in which 
two other terms of frequent subsequent occurrence, are to be 
received. Some instruments are easily moved from place to 
place, and, on this account, there are peculiar facilities, in 
exchanging them with others. This seems to be the character 
distinguishing what are called goods, or commodities, from 
other instruments, and it is in this sense, that these terms 
will, in the subsequent pages, be employed. 



[It is not through inadvertence that several times during this chapter Rae 
speaks of events which instruments "produce." His notion of production, 



24 GENERAL rilOrEUTIES OF INSTRUMENTS 

nmde abundantly clear elsewhere, excludes the part man plays, and has refer- 
ence only to the part played by the instrument — its functioning, its bringing 
things to i)ass as the last link in the chain of causation. His formula for the 
total process which we call production would be : man forms aiul directs 
instruments, whicii last produce events which constitute satisfactions of want, 
or, events leading toward satisfactions of want. It is desirable to make such 
a distinction, but without running counter to accepted tei-minology. For the 
part played by instruments, Hae iiimself, in this chapter and elsewhere, 
incidentally supplies us with an appropriate name, — generation. "The 
circumstances we have hitherto assumed as conunon to all instruments, and 
the events they generate. . . ."] 



CHAPTER III. 

OF CEETAIN CIRCUMSTANCES ARISING FROM THE 
INSTITUTION OF SOCIETY. 

1, Man hardly exists but in the social state. If separated 
from infancy from his fellows, his peculiar faculties scarcely at 
all develop themselves. His mental and bodily capacities and 
energies seem, also, to be moulded by the condition of the 
society of which he is a member. We may venture to predict, 
that three children born tomorrow, one in Caffraria, another 
in China, and a third in London, and remaining in their 
respective countries till the age of twenty, will be very 
different beings, and that each will possess the mental and 
bodily peculiarities, that characterize the particular community 
to which he belongs. The same things, though in a lesser 
degree, hold true concerning the men composing every nation. 
Whether these characteristics of different races, tribes, and 
peoples, proceed altogether from some peculiar hereditary con- 
formation of the bodily organs, or from the effects of education, 
example, and habit, or from the combination of these, or from 
other causes, it is very certain that they exist, and that the 
moral and intellectual condition, as well as the bodily organiza- 
tion of men, vary, as they belong to this, or that society. 
Besides this, institutions, forms of government, and laws, 
influence somewhat the genius, and considerably affect the 
conduct, of every people, and these also are very various, it 
thus happens that every society has, what may be termed, a 
distinctive character of its own. 

It is therefore assumed, in the succeeding investigations, 



26 OF SOCIAL SOLIDARITY 

that the moral and intellectual powers, the knowledge, the 
habits and dispositions of the men composing every separate 
community, society, nation, state, or people (terms which, as 
far as our subject is concerned, may be considered synonymous), 
are such as to give it a peculiar character distinguishing it 
from otlier communities. It is also assumed, that the average 
character of the members of different portions of the same 
community is similar, so that, were a considerable number of 
the inhabitants of any particular state, taken from one part of 
its territories, they would closely resemble an equal number, 
taken from any other part. This latter assumption is not 
exactly accurate. There are great differences, especially in 
extensive states, between the characters of the inhabitants of 
different portions of the same territory. These diversities 
render it sometimes necessary to modify the conclusions that 
follow from considering the average character of the members 
of the same community as perfectly similar. Thus, the 
differerent characters of the inhabitants of England, Ireland, 
and Scotland, affect somewhat deductions in this subject, 
drawn from treating the characters of the population of 
different parts of Britain as uniform. In truth, every large 
society might be divided into several smaller societies, differing 
somewhat from each other. If they differ in some particulars, 
however, they agree in many more, and certain results follow 
from this agreement, which make it convenient to treat of 
them as one. If necessary too, the amount of the inaccuracy, 
arising from the assumption of a more perfect uniformity than 
exists, may be ascertained. 

2. Man, as an organic being, is governed by laws similar 
to those which other organic beings obey. Our subject 
obliges us to advert to a consequence arising from one of 
them. 

In the midst of the nmnerous revolutions and accidents 
to which the surface of the globe is subject, it is always 
abundantly replenished with animal and vegetable life, and 
the numbers of every race upon it are kept up to the quantity 
of materials fit for their subsistence which it affords them. 
The increase and decrease of the human species, follows the 
general law. This seems to be the foundation of what has 



OF SOCIAL SOLIDARITY 27 

been termed the doctrine of population. In the subsequent 
pages it is received, simply as a statement of the fact, that 
the numbers of every society increase, as what its members 
are inclined to esteem a sufficient subsistence, is provided for 
them.^ 

The great majority of the members of every community, 
procure their subsistence by labor, and, according to this 
principle, the number of laborers in every community must 
finally depend on the amount of those things esteemed by 
them sufficient for their subsistence, which is annually dis- 
tributed among them. It has been supposed, however, that 
there is a constant oscillation above and below this limit, and 
that sometimes therefore the supply having to be divided 
among a greater number, the amount that each receives is 
less, sometimes, having to be divided among a smaller number, 
is greater, and thus that the wages of labor, though they 
always tend towards a fixed standard, never remain at it. 
Admitting that this continual vibration may take place, I 
conceive I may be permitted nevertheless to disregard it, 
and to assume that the remuneration awarded the laborer, 
is, in the same society, always a fixed quantity. As it is not 
intended to enter into any investigation of the principles 
determining the amount of the wages of labor in all societies, 
and at all times, nor to discuss the somewhat contradictory 
doctrines that have been maintained on this subject, the most 
simple assumption, and that, the errors arising from which 
may be supposed to balance each other, seems the best. 

Even considering the subject however under the most 
simple conditions possible, there are still some difficulties 
attending it. The articles which the laborer uses, for food, 
clothing, etc., and which constitute his real wages, are con- 
tinually varying. Thus, among the working classes in Great 
Britain, fabrics of cotton have, in a great measure, taken 
the place of those of linen, and wool for clothing ; as coal has 
taken the place of wood for fuel. Seeing there is this change 
in what constitute the wages of labor, how then, it may 

^ [This is an uncritical following of the teaching of Malthus upon which Rae 
made a great advance in his later years. (Compare the last part of Chapters 
VI. and XIII., and the Article on Population in the Appendix.)] 



28 OF SOCIAL SOLIDARITY 

be demanded, can wages at any two times be considered 
equal ? 

In answer to such a question, it may be observed in general, 
that all articles supplying the wants of the laborer, and form- 
ing his real wages, are fitted for this purpose by some physical 
qualities they possess, producing certain effects on his bodily 
organs, and through them, occasionally, on the perceptions and 
thoughts of his mind. One article, therefore, may be esteemed 
equal to another and different article, if the effects produced 
by both are equal. Thus a certain quantity of coal, may be 
considered equal to another of wood, if each gives out the same 
degree of heat. In many cases it is indeed very difficult 
to make this comparison with accuracy. This however is not 
absolutely necessary for our purpose, it being sufficient to con- 
ceive, that, what are termed the wages of labor, in the same 
society at different periods, are really equal quantities, 
whether we have, or have not, the means of measuring 
them, and ascertaining that they actually are so. This 
may evidently be assumed, if we suppose that the laborer 
is equally well nourished, clothed, lodged, and instructed, 
and has equal leisure, at the one period and at the other ; 
whether he be fed, clothed, and lodged, in the same way 
or not. 

As the vigor of mind and body, as well as the skill, of 
different individuals in the same society, are unequal, the rate 
of the wages of labor, even in the same society, is far from 
uniform. It is however difficult and in general reasonings un- 
necessary, continually to refer to this variety ; and as it has, 
in consequence, been usually neglected, we shall not farther 
advert to it. 

According to the preceding assumptions, labor, in the same 
society, is to be considered as an invariable quantity, and 
a day's labor as the unit, serving as the base for calculations, 
concerning the formation and exhaustion of the capacity of 
instruments. It is to be observed, however, that when so 
employed, it finally refers, not to the mental and corporeal 
effort exerted throughout the day by the laborer, but to the 
wages received by him. The laborer is, usually, merely the 
agent of some other person, and that other person is, in 



OF SOCIAL SOLIDARITY 29 

reality, the one forming the instrument constructed, as the 
wages of the laborers employed by him are the causes of 
its being constructed.^ In cases, too, where the laborer works 
for himself, he rates his daily labor equal to a certain amount 
of some of the things he is in the habit of consuming, and this 
amount may be considered, as what he really gives to the 
construction of the instrument, in the formation of which he 
employs himself. 

The rates of wages vary, very much, in different societies. 
A Chinese laborer, for example, subsists on very much less 
than an English laborer. On the principles of calculation 
which we have adopted, there is, therefore, a difference, in 
the quantity embraced by a day's labor in one country and 
in another, and we cannot immediately compare, by this 
means, instruments formed in one society, with those formed 
in another. Our system has, in this respect, an analogy 
to the different systems of numeration, with regard to weights, 
measures, and coins, adopted in different countries. It will, as 
we proceed, appear, that this diversity in the rate of wages, 
in different communities, has also other and more important 
effects. 

3. Every society possesses a certain amount of materials 
capable of being converted into instruments. The surface 
of its territory, the various minerals lying below the surface, 
its natural forests, its waters, the command it may have of 
the ocean, and its consequent property in the minerals and 
animals contained in it, the rain that waters its soil, the 
elementary principles that may be extracted from the atmo- 
sphere, even, perhaps, the light and heat of the sun, are 
all to be regarded as materials, which, through the agency 
of the labor of its members, may be converted into instru- 
ments. The extent of the power, which the inhabitants 
of any state may possess, to convert into instruments the 
materials of which they have the command is however 

^ [This is one of the comparatively few places where Rae speaks specifically of 
"laborers" and touches upon the function of the entrepeneur. It is not 
"man " in general but the enlrtpentur, in our state of civilization, who forms 
instruments from materials with the aid of hired "labor," which last thus 
becomes economically an analogue of " materials."] 



30 OF SOCIAL SOLIDARITY 

variable ; and increases, as we have seen, as their knowledge 
of the properties of these materials and of the events, which 
in consequence of them, they are capable of bringing to pass, 
increases. Thus the large extent of the knowledge of the 
civilized man, compared with that of the savage or barbarian, 
gives him the power of constructing a much greater number of 
instruments out of the same materials, and enables the Euro- 
pean emigi-ant to convert the soil and forests of America 
or New Holland, into means of producing a great mass of 
desirable events, which it was beyond the technical capacity 
of the ignorant native to effect. 



CHAPTER IV. 

A METHOD FOE THE COMPAEISON OF INSTEUMENTS. 

As by the capacity of instruments is to be understood their 
power to produce, or bring to an issue, events equivalent to a 
certain amount of labor, and as they are also formed by labor, 
it is evident that the capacity given to any of them, and the 
labor expended in its formation, have determinable numerical 
relations to each other. The length of time likewise, elapsing 
between their formation and exhaustion, may be expressed in 
numbers. If a series then were devised, of such a nature, that 
any relation that can exist among these three quantities, in 
consequence of their varying proportions to each other, might 
be embraced in it, every possible instrument would find a place 
there. 

It is to be observed that, in consequence of a principle soon 
to be explained, no instruments will be designedly formed, but 
such as have a greater capacity, or issue in events equivalent 
to more, than the labor expended in their construction. This 
circumstance renders the formation of such a series more easy, 
as it renders it unnecessary to take account of any other in- 
struments than such as issue in events equivalent to more than 
the labor expended in their formation, or, what may be termed, 
the cost of their formation. To simplify the consideration of 
the matter, we may, for a little, proceed on the supposition, 
that every instrument is constructed at one precise point of 
time, and exhausted at another. In that case, every instru- 
ment would find a place, in some part of a series, of which 
the orders were determined by the period of time at which 



32 THE COMPARISON OF INSTRUMENTS 

instruments placed in them, issue, or would issue, if not before 
exhausted, in events equivalent to double the labor expended in 
forming them. These orders may be represented by the letters 
A, B, C, * * Z a, h, c, etc. The relation to each other of the cost 
of formation, the capacity, and the time elapsing between the 
period of formation and that of exhaustion, of instruments in 
tlie order A, is such as may be expressed by saying, they in 
one year issue in events equivalent to double the labor ex- 
pended on their formation, or would so issue, if not before 
exhausted. The relation between these, in instruments of the 
order B, is such, that in two years they issue in events equi- 
valent to double the labor expended on them, and are then 
exhausted. Instruments in the order C, in three years issue 
in events equivalent to double the cost of formation ; of the 
order D, in four years ; of the order Z, in twenty-six years ; of 
the order a, in twenty-seven years, etc. For the sake of 
facility of expression, instruments in the order A, or in the 
orders near it, will be said to belong to the more quickly 
returning orders ; instruments in the order Z, or in the orders 
near it, or beyond it, will be said to belong to the more slowly 
returning orders.^ 

To imagine, in the first place, as simple a case as possible. 
An individual, say an Indian trader, is obliged to reside on a 
particular spot in the interior of North America, for somewhat 
more than a year. He arrives in autumn, and immediately 
sets about enclosing and digging up a piece of ground, for the 
purpose of having it planted with maize. He expends on this 
twenty days' labor. That labor he reckons equivalent to ten 
bushels of maize. He gets the maize planted, hoed and 
harvested next season, by Indian women, agreeing to give 
them part of the crop. After deducting their portion he has 
twenty bushels for himself, with which he leaves the place. 
The field he formed was then an instrument of the order A. 
The same individual has to reside a little more than two years 

^ [A more correct expression would be the "more (|aickly " or "more 
slowly " dowWini/ " orders. " The degree of speed with which an instrument 
yields returns, or the physical results of its functioning, is only one of the factors 
which determines the time in wliich it affords double the outlay on its forma- 
tion, and which places it in a certain order.] 



THE COMPARISON OF INSTRUMENTS 33 

in another quarter of the interior. He clears, or has cleared 
on his arrival, another piece of ground, and also expends on 
this operation twenty days' labour. Owing however to the 
soil being overrun with small roots, and it being necessary to 
wait till they partially rot before a crop can be put on it, he 
is aware that it cannot be planted until the second year. It is 
then planted as before, and, as it happens, with the same event 
as in the former field, yielding him net twenty bushels of maize. 
This field then was an instrument of the order B. In the same 
way it is possible to conceive the formation and exhaustion of 
other instruments of this sort, answering to the orders C, D, E, 
etc., the capacity of them all being double the cost of formation, 
and the times intervening between the periods of formation and 
exhaustion, being respectively three, four, five, etc. years. Al- 
though, however, instruments exactly corresponding to the 
conditions assumed, may occasionally exist, and although it is 
possible at least to conceive their existence throughout a 
lengthened series, yet, in fact, they seldom do exist so as 
exactly to answer the suppositions. In by far the greater 
number of instances, neither are the times elapsing between 
the periods of formation and exhaustion, any exact number 
of years, nor are the capacities exactly double the cost of 
formation. But, in all variations of these three quantities 
from an exact correspondence with any of the orders, the 
proportions existing between them, will, nevertheless, always 
be such, as to make it possible to reduce the instruments 
in which they occur, to some order or another in our series, 
or to an order that may be interposed between two proxi- 
mate orders. 

Such variations may be reduced to three sorts. The first 
consists of instances where the capacity is double the cost of 
production, but the time, no exact number of years. In this 
case, the instrument does not exactly belong to any of the 
enumerated orders, but falls between two proximate orders : it 
may therefore be said to belong to an order, that may be sup- 
posed to be interposed between these two. Thus, an instru- 
ment being exhausted in between seven and eight years, and 
having a capacity equal to double the cost of production, 
might be said to belong to an order lying between G and H. 

c 



34 THE COMPARISON OF INSTRUMENTS 

This designation would mark its character with sufficient 
accuracy for our purpose. 

There are only two other cases. The capacity of the instru- 
ment may be exhausted before it arrive at an amount equal 
to double the cost of formation, or, it may not be exhausted 
until it has come to an amount greater than double the cost of 
formation. In the former case it is necessary to suppose the 
period of exhaustion prolonged, the excess of the capacity of 
the instrmnent over the cost of formation increasing at the 
same ratio, until the capacity double the cost. It will then be 
shown to belong to some particular order, or to lie between 
two proximate orders. Thus, let an individual have it in his 
power to make use of a small plot of ground for six months, 
and let him expend an equivalent to two days' labor in prepar- 
ing it for receiving the seeds of some plant, sowing them, and 
cultivating the crop, and let it return him, at the end of six 
months, an amount, which, reduced to the value of days labor, 
would be 2 '8 2 8. If then we suppose the period of exhaustion 
prolonged, the excess of the capacity over the cost increasing 
at the same ratio, in twelve months time the capacity will 
be 4 ; for, 2 "8 2 8 is a mean proportional between 2 and 4. 
The instrument formed by the plants so cultivated, would 
therefore belong to the order A, that order doubling in one 
year. 

In the case where the capacity comes to more than double 
the cost of formation, the order in which the instrument should 
be placed, is to be found, by retracing the progress of its 
capacity, under the supposition that it advanced at the same 
rate, until we arrive at a period when it was only double the 
cost. The interval between that and the period of formation, 
will then indicate the order to which it really belongs. 

The bread fruit tree is perhaps twenty years old before it 
will bear; but ten of these trees, when in bearing, will, it is 
said, nearly supply a family of South Sea islanders with a 
sufficiency of this sort of food for eight months in the year. 
This sort of fruit tree requires, too, no other labor or 
attention than that bestowed in planting it. Suppose, then, 
that an inhabitant of one of those islands were to spend an 
hour in planting a few of these trees, and that, according to 



THE COMPARISON OF INSTRUMENTS 35 

the hypothesis of sudden exhaustion, on which we are proceed- 
ing, at the termination of the twenty-two years they are 
exhausted, yielding at that period an equivalent to two 
thousand and forty-eight hours' labor. If then we retrace 
the progress, at which the capacity of this instrument has ad- 
vanced, we will find that it belongs to the order B. For 
instruments in that order doubling in two years, one hour's 
labor, if employed in forming an instrument of that order, 
ought to yield an equivalent to two hours, at the end of the 
second year ; and being then employed in constructing other 
like instruments, at the end of the fourth year should yield an 
equivalent to four hours, at the end of the sixth to eight, and 
so the geometrical series, 2, 4, 8, 16, etc. would arise, which, 
carried out to the eleventh term, at the end of the twenty- 
second year, is 2048. It may perhaps serve somewhat to 
illustrate the matter, to suppose, that the individual who 
applied an hour's labor to planting the bread fruit tree, gave the 
same portion of time to the cultivation of another sort of 
plant, yielding its produce and perishing, at the termination of 
the second year from the time of its being placed in the soil, 
and the returns made from which are equal to double the 
labor expended on its culture. Instead of consuming the crop 
at the termination of the second year, he gives it to some 
other person or persons, on condition of their applying for his 
benefit two hours' labor, its equivalent, to the culture of a 
second crop ; at the end of the fourth year, he proceeds in the 
same manner, and, continuing the process, at the termination 
of the twenty-second year, the produce of the labor of both 
hours, the one applied to the cultivation of the former plant, 
and the other to that of the latter, would be equal. The only 
difference in the cases would be, that the person in question 
would, in the latter case, have the trouble of making a 
bargain with one or more individuals every second year, and 
would then also have the power to apply, if he so chose, to the 
supply of his wants, the events, in this instance brought about 
by his previous expenditure ; and that, in the latter case, he 
would have neither the power nor the trouble. 

We have assumed, that all instruments are formed at one 
point of time, and exhausted at another. This is the case with 



36 THE COMPARISON OF INSTRUMENTS 

but very few. The period of formation almost always spreads 
over a large space of time, and that of exhaustion, over 
another. It is evidently, however, possible to fix on a point, 
to be determined by a consideration of all the periods at which 
the labor going to the formation was expended, which shall 
represent the true period of formation ; and on another point, 
determined from a consideration of similar circumstances 
regarding the times when the capacity was exhausted, which 
shall represent the true period of exhaustion. 

Thus, suppose a small field in some new settlement in North 
America were formed by twelve days' labor, it would, were it 
of the order A, return in one year an equivalent to twenty-four 
days' labor, and then be completely exhausted and worthless. 
It might be, however, that it belonged to this order, although 
it neither yielded so much as twenty-four days' labor, nor was 
exhausted at the end of the year. Say, that the crop sown is 
wheat, and, that one bushel of wheat is equivalent to one day's 
labor. Were it at once exhausted, it ought to yield twenty- 
four bushels of wheat ; it however only yields eighteen, and is 
not then exhausted. There is consequently a deficiency of six 
bushels. Now, six bushels at the end of the second year, at 
the same rate of doubling in a year, ought to produce twelve. 
Let us suppose that the next crop is hay, and that the net hay 
yielded the second year is one ton, equal to eight bushels 
wheat, then (12 — 8 = 4), there is still a deficiency of four 
bushels, equivalent, at the end of the third year, to eight. If, 
therefore, the next crop of hay the third year, be equal to what 
it was the second, that is to eight bushels wheat, the deficiency 
will then be made up. Let us suppose that it is so, and that 
the field is at that time totally exhausted and useless. It is 
evident, that such a field, though not producing or being 
exhausted as by the supposition, yet producing and being 
exhausted, in a manner equivalent to the supposition, might, 
with propriety, be said to belong to the order A, 

But, it is farther probable, that such a field might not pro- 
duce quite so much grain, or hay, as we have even by the last 
hypothesis supposed, and would not even at the end of the 
third year, or for a much longer period, be exhausted ; still, if 
the deficiency in the one were equivalent to the farther supply 



THE COMPARISON OF INSTRUMENTS 37 

in the other, it would evidently properly belong also to the 
same order. 

Again, by the suppositions we have made, the labor, or its 
equivalent, was expended exactly at the commencement of the 
period of one year. It might however have been, that some 
part of the expenditure, going to the formation of this instru- 
ment, was made several months before the commencement of 
the year, and some several months after. But, had what was 
expended before, been proportionably less, and what was 
expended after, proportionably greater, the change would not 
make any alteration to the relation existing between the time 
and the expenditure, or, consequently, to the place of the 
instrument. 

The spaces over which the several points of time, at which 
the formation of any instrument is effected, extend, and those 
over which the several points of time at which its capacity is 
exhausted also extend, frequently run into each other. Thus 
according to our system a riding-horse is an instrument. The 
space of time over which the whole period of his formation 
extends, commences when his dam is put apart for breeding, 
continues as long as any thing is laid out for the purpose 
of giving efficiency and durability to him as an instrxunent, 
and probably therefore only terminates a few days before the 
death of the animal. There would be a number of points all 
along that space, at each of which something had been ex- 
pended on his account, and from the date of which, and the 
amount expended at each, data would be furnished, to ascertain 
the whole expense of his formation, and the precise point from 
whence it might be dated. The whole period of his exhaustion 
would also extend over a large space. It would commence 
when he was first ridden for pleasure, or business, and would 
terminate shortly after his death, when his hide went to the 
tanner, and his flesh to the dogs. An account of the several 
items expended, and the times when they were expended, and 
of the several items yielded, and the times at which they were 
yielded, would furnish data for determining the total cost of 
formation and capacity and the points to be fixed on as the 
periods of formation and exhaustion, and thus the place of the 
instrument could be determined. 



38 THE COMPARISON OF INSTRUMENTS 

Calculations of this sort would be intricate, and could not be 
well effected without having recourse to methods, not usually 
employed in investigations like the present. In point of fact, 
there is in practice, as we will afterwards see, a system of 
notation of instruments, which enables us pretty accurately, 
and very easily, to determine their place in such a series as we 
have supposed. It is sufficient for the end here aimed at, to 
perceive that when all particulars are known, concerning the 
formation and exhaustion of any instrument, and the periods 
intervening between these, data are then furnished for placing 
it in some part of such a series as we have described ; and that 
it may consequently be assumed that every instrument does, in 
reality, belong to some one order in the series A, B, C, D, etc., 
or to an order that may be interposed between some two 
proximate orders of that series. 

It may perhaps appear, that though, could instruments be 
considered apart, the foregoing explications might serve to 
show, that they might all be reduced to a place in our series, 
yet, as they very commonly act in combination, and as, in such 
instances, the events in which two or more of them issue are 
the same, it must be impossible to fix with accuracy the order 
to which each belongs. Thus, a horse and a cart form together 
an instrument for the transport of goods. The events, there- 
fore, in which both issue, being the same, we cannot measure 
the part that may belong to each, in any other manner, than 
by appropriating to each the proportion indicated by their 
respective costs of formation, and hence they will both appear 
to belong to the same order, though perhaps they do in fact 
belong to different orders. But our subsequent inquiries will 
show, that the great mass of the instruments existing in the 
same society are, in reality, at about the same orders ; and, 
that instruments acting in combination with other instruments, 
are almost always at the same orders. This objection is there- 
fore removed, as all instruments acting in combination may 
thus be considered as one. 

Instruments are frequently repaired. The labor or its 
equivalent, so expended, may be considered, either as a partial 
reformation of the old instrument, or as the addition of a new 
instrument to be combined in action with the old one. The 



THE COMPARISON OF INSTRUMENTS 39 

same rules therefore, apply to repairs effected on instruments, 
as to their original formation. 

We have assumed, hitherto, that both formation and ex- 
haustion are properties common to all instruments. There is 
however a class of instruments, that forms an exception to this 
general rule. An extensive and important class exists, of a 
nature so peculiar, that the instruments belonging to it are 
never exhausted, unless in consequence of some revolution in 
the circumstances of the society. That part of the surface of 
the earth devoted to agricultural purposes composes this class. 
The peculiarity arises from every portion of land so employed, 
forming two distinct instruments. A piece of land, that it 
may do its part in providing a supply for future wants, must 
first be rendered capable of culture, and then be cultivated. 
It is not necessary that he who renders it fit for culture, 
should also cultivate it, though it commonly happens that both 
operations are performed by the same individual. But by 
whomsoever the operation of converting waste land, into land 
bearing crops, be performed, two ends are always gained by it, 
the power of cultivation, and the actual culture. There is this 
great difference between them, that while the changes pro- 
duced in a piece of land to fit it for cultivation are lasting 
(remaining unless some means be taken to do away with 
them), those that are effected on it by the actual process of 
cultivation are of short, or at all events, of limited duration. 
When an individual has converted a portion of morass or 
forest, into a field fit for the operations of tillage, it does 
not return again to the state of morass or forest. He has 
fitted it for being made an instrument of agriculture, or 
rather a succession of instruments of agriculture. The 
farmer, by manuring it, sowing certain seeds in it, and 
tilling it, forms it into such an instrument. The changes 
he thus effects, however, pass away. The seeds he sows, 
growing into plants of different kinds, are carried off; the 
manure yields part of its substance to them, and is in part 
dissipated; the soil that had been loosened and pulverized 
by the plough and harrow, is gradually again compacted 
and hardened, by the effects of the action of the sun 
and rain. As far, then, as it was actually an instrument of 



40 THE COMPARISON OF INSTRUMENTS 

agriculture it is exhausted. But its power of being again 
formed into such an instrument remains, and the same opera- 
tions, the same rotation of crops, may indefinitely succeed one 
another. 

The individual who first forms a portion of land into these 
combined instruments, has probably in view, only the ends to 
be gained by one of them. His motive to expend labor on the 
formation of the field, is to fit it for immediate culture. But, 
he cannot effect this, without also rendering it capable of being 
cultivated to all succeeding times. The returns, which for 
this reason it makes in those succeeding times, form what is 
called rent; and this peculiarity in the nature of this sort of 
double instrument, is one of the chief causes of the existence 
of that particular species of revenue. Any portion of land, 
therefore, which bears a crop, considered as regards its fitness 
for being cultivated, is an instrument of indefinite exhaustion, 
and will not consequently coincide with the conditions by 
which the orders in our series are determined. We shall 
afterwards see, that in every instance it may, notwithstanding, 
be reduced to a determined place in that series. A portion of 
cultivated land, considered as an instrument actually subject 
to the operations of the husbandman, does not differ from any 
other instrument.^ 

In conclusion, it may be observed that the position in our 
series which any instrument will occupy, is determined by the 
following circumstances. 

1. The shorter the space of time between the period of its 
formation, and that of its exhaustion, the nearer will any 
instrument be placed to the order A, that is, towards the more 
quickly returning orders. 



1 [Possibly the novel ideas set forth above will advantageously bear restate- 
ment. 

Land made fit for cultivation, but not in process of cultivation, is an instru- 
ment toward the attainment of crops. It is formed from materials, that is, 
from mere land surface. The farmer, when he manures, plants and tills, makes 
an ephemeral superimposed instrument. Rent is paid, in Eicardian phrase, 
for the "indestructible powers of the soil"; but these powers are not 
" original," but were produced or rendered available by him who first brought 
a certain area of land surface into a state fit for cultivation.] 



THE COMPARISON OF INSTRUMENTS 41 

2. The greater the capacity, and the less the cost of its 
formation, the nearer will any instrument be to the order A ; 
the less the capacity, and the greater the cost of formation, 
the farther will it be from A. 

Generally, the proximity of instruments to A is inversely as 
the cost and the time, and directly as the capacity. 



CHAPTER V. 

OF CERTAIN TECHNICAL CIRCUMSTANCES GOVERNING 
THE AMOUNT OF INSTRUMENTS FORMED. 

Having traced the general nature of instruments, and shown, 
that the relations existing among the circumstances by which 
they are affected, make it practicable to arrange them in a 
regular series, the object next claiming our attention, is, to 
ascertain the causes determining the amount of them which 
each society possesses, and to note the more remarkable 
phenomena which the operation of those causes produces. 

The causes determining the amount of instruments formed 
by any society, will, I believe, be found to be four. 

1. The quantity and quality of the materials owned by it. 

2. The strength of the effective desire of accumulation. 

3. The rate of wages. 

4. The progress of the inventive faculty. 

The nature of the second of these, and the circumstances on 
which its strength depends, will form the subject of the next 
chapter, but previously to entering on it, it is necessary to 
establish the following proposition. 

llie capacity which any people can communicate to the mate- 
rials they possess, hy forming them into instruments, cannot be 
indefinitely increased, while their knowledge of their poivers and 
qualities remain stationary, without moving the instruments 
formed continually onivard in the series A, B, C, etc.: hut, there 
is no assignable limit to the extent of the capacity, ivhich a people 
having attained considerable hioivlcdge of the qualities and powers 
of the materials they -possess, cayi co-mmunicate to them, toith&ict 



OF TECHNICAL LIMITATIONS 43 

carrying them [wholly'] out of the se7'ies A, B, C, etc., even if that 
knowledge remain stationary} 

The capacity of instruments may be increased, by adding to 
their durability, or to their efficiency; that is, by prolonging 
the time during which they bring to pass the events, for the 
purpose of effecting which they are formed, or, by increasing 
the amount of them which they bring to pass within the same 
time. 

A dwelling-house is an instrument, aiding to bring to an 
issue events of various classes. It more or less completely 
prevents rain, damp, and the extremes of cold and heat, from 
penetrating to the space included within its area. It preserves 
all other instruments contained within it, in comparative 
safety. It gives those who inhabit it the power of carrying 
on unmolested, various domestic occupations, and of enjoying, 
undisturbed by the gaze of strangers, any of the gratifications 
or amusements of life, of which they may be able and desirous 
to partake. Events of these sorts, it may bring to pass, for a 
longer or shorter time, or to a greater or less extent, within 
the same time. In the former case, the durability is increased, 
in the latter, the efficiency ; in both, the capacity is augmented. 
Dwelling-houses are built of different materials, and those 
materials are wrought up with more or less care. A dwelling 
might be slightly run up of wood, lath, mud, plaster, and paper, 
which would be habitable only for a few months or years, like 
the unsubstantial villages that Catherine of Eussia saw in her 
progress through some parts of her dominions. Another of 
the same size, accommodation, and appearance, that might last 
for two or three centuries, might be constructed, by employing 
stone, iron, and the most durable woods, and joining and 
compacting them together, with great nicety and accuracy. 
Between these two extremes there are all imaginable varieties. 
According to that adopted, both the durability and the effi- 
ciency will be greater or less. These two may be separated 
from each other, at least in imagination, and therefore we may 
consider them apart. 

^[In other words, in the absence of the advance of the arts, extension of 
industrial operations meets with a resistance, but that resistance is never 
absolute. ] 



44 OF TECHNICAL LIMITATIONS 

If the increased durability that may be given an instrument 
be considered apart from the increased efficiency that will also 
probably be communicated to it, it must be regarded simply as 
an extension of its existence, and consequently as a like exten- 
sion of its capacity. A dwelling-house lasts, we shall say, 
sixty years, but in other respects is perfectly similar to one 
lasting only thirty years. Considered as an instrument, the 
former is, therefore, exactly equal to two of the latter, the one 
formed thirty years after the other. A house lasting one 
hundred and twenty years would in like manner have the 
capacity of four houses, one formed now, a second thirty, a 
third sixty, and a fourth ninety years hence. The capacity 
thus increasing at the same rate as the duration, if the limits 
to the power of giving durability be indefinite, the limits to 
the power of communicating capacity are also indefinite. 

But to give additional durability to the instrument there 
must be additional labor bestowed on its formation. An 
increase of the durability of an instrument may therefore be 
considered as a power communicated to it of giving existence 
to a new instrument at the end of a certain period, and pur- 
chased by a present expenditure. The effects [that is, the net 
economic result] produced by the change will be determined by 
the relations subsisting between the returns made by the 
addition, its cost, and the time elapsing between the expendi- 
ture and return. If we suppose the present expenditure 
necessary to produce the durability, to be always equal to the 
durability produced, then the compound instrument will be 
moved towards the more slowly returning orders, because the 
new instrument is in that case one of slower return. One 
dwelling-house lasts thirty years ; another, the same as it in 
other respects, but costing double the expense of formation, 
lasts sixty years ; the former house is an instrument of the 
order 0, doubling in fifteen years. The part of the duration 
of the latter extending from the thirtieth to the sixtieth year, 
is to be considered, by our hypothesis, as a separate instrument. 
If we suppose, that during the time it is in use it returns as 
the other, at the end of the sixtieth year it will have returned 
only four, and, therefore, is an instrument of the order c 
doubling only in thirty years. The compound instrument will, 



OF TECHNICAL LIMITATIONS 45 

in consequence, be of an order between X and Y, doubling in 
between twenty-four and twenty-five years. The procedure of 
adding to the durability, by adding equally to the expense of 
formation, will have greater effect in placing an instrument 
further from A, the more it is subjected to its operation. Thus, 
were an instrument of this sort to have its duration prolonged 
to one hundred and twenty years, and at the same expense, the 
last thirty would return only four in one hundred and twenty 
years, whereas, had it formed an instrument of the order 0, it 
ought to have yielded two hundred and fifty-six. Were the 
durability increased still farther, at the same cost, the diver- 
gence would be much greater, going on in a geometrical ratio. 
If, therefore, continual additions be made to the durability of 
an instrument, it cannot be preserved at an order of equally 
quick return, unless the several augmentations be communi- 
cated to it, by an expenditure diminishing in a geometrical 
ratio ; that is, in a ratio becoming indefinitely less, as it is 
continued. This, however, cannot happen, for it would imply 
an absurdity. While instruments are in existence, they are 
either producing events, or giving a new direction to their 
course. But mere matter, unless in some very rare instances, 
is never acting, or acted upon, without undergoing a change. 
This we term wear, and the effects it indicates form conse- 
quently a definite power, to counteract which, a definite force 
must be found. It cannot then, be counteracted, by a force 
indefinitely small. 

The same thing may be illustrated in another manner. 
When events are produced and governed by design, they in 
turn generate other events of greater powers than themselves, 
and these others, in a series rapidly increasing. Mere dura- 
bility in instruments, may be considered as a capacity to 
generate future events, lying dormant in them, till the lapse of 
years exposes its existence, and gives it opportunity to act. 
The greater the time therefore, for the expiration of which it 
must wait, the less the chance of its being on an equality with 
rivals, whose powers are continually and rapidly multiplying 
either events, or enjoyments, whenever they have a field on 
which to exert their energies. 

While the knowledge of the course of events which the 



46 OF TECHNICAL LIMITATIONS 

members of any society possess remains unaltered, and the 
materials they own are the same, the duration of the instru- 
ments they form cannot, consequently, be indefinitely increased, 
without their being moved, farther and farther, from the more 
quickly returning orders. 

The durability of instruments refers only to those of gradual 
exhaustion ; their efficiency, or the extent of their power to 
bring about events within a certain time, refers both to those 
of gradual, and of sudden exhaustion. If the knowledge of 
the course of events, and the amount of the materials remain 
the same, the efficiency of these materials when formed into 
instruments cannot be indefinitely increased, without that 
increase being at length made with additional difficulty, and 
through means of an amount of labor greater than was re- 
quired in the earlier stages. The action of matter upon 
matter always depends on some cause. Those causes, — the 
inherent qualities and powers of the different matters around 
him, — are the means man employs to make one material to act 
so on another as to produce the events he desires, and he does 
so by applying his labor to give them such a form and posi- 
tion as may bring their powers into play. If we suppose any 
number of men to be fixed to one situation, and their know- 
ledge of the qualities of the materials around them to remain 
stationary, they will naturally first make choice of those 
materials, whose powers are most easily brought into action, 
and which produce the desired events most abundantly and 
-speedily. But as the stock of materials which any society 
possesses, is limited, its members, if we suppose them to 
acquire no additional knowledge of the powers of those 
materials, and yet to add continually to the amount of instru- 
ments they form out of them, must at length have recourse to 
such as are either operated on with greater difficulty, or bring 
about desired events more sparingly or tardily. The efficiency 
of the instruments produced must therefore be generated by 
greater cost ; that is, they must pass to orders of slower 
return.^ 



1 [There is, in our present-day phraseology, a descent of industry in the 
society to a lower margin of productivity.] 



OF TECHNICAL LIMITATIONS 47 

This passage will be rapid, or slow, as the amount of know- 
ledge possessed is small, or great. "When art is in its infancy, 
and men know but a few of the properties fitting them for 
becoming instruments that are inherent in the materials in 
their possession, they cannot much vary their mode of proceed- 
ing on them, by combining, and giving new turns to their 
actions on each other. In more advanced stages of society, on 
the contrary, where the powers of a great number of materials 
are known, and where consequently their operations on each 
other may be combined, and multiplied to a great extent, the 
means by which the same end may be attained are very 
numerous. Some of them are more easy or expeditious than 
others but they differ by very slight degrees, and the instru- 
ments formed by successively adopting them, would occupy 
positions in our series not widely distant from one another. 

If we then consider the capacity that may be given any 
amount of materials, by a society among whom the progress of 
art is stationary, as separated into the durability, and 
efficiency, of the instruments its members form, it would 
appear, that they are both subject to similar laws, and that 
neither can be indefinitely increased, without carrying the 
instruments constructed continually on, to orders of slower 
return. The same general conclusions must obviously hold 
good, concerning the capacity considered as combined of both. 
There is, however, a circumstance flowing from the considera- 
tion of this union, which is deserving of notice, as it has 
considerable effect in the relations between the cost and 
capacity of instruments, and, consequently, on the position to 
be assigned them. It often happens, that additional labor 
bestowed on an instrument, to give it greater efficiency, gives 
it also greater durability. Thus the same choice of materials, 
and the same careful and laborious formation of them, that 
render the walls of a dwelling-house effective in excluding the 
inclemency of the weather, give it also solidity and strength, 
and consequently prolong its duration. A tool, in the fabrica- 
tion of which good steel has been employed, not only cuts 
better, but lasts longer, than one formed of inferior stuff. In 
such cases, and they are very numerous, the capacity being 
increased both as concerns durability and efficiency, by the 



48 OF TECHNICAL LIMITATIONS 

same outlay, its proportion to the cost is greater, and a larger 
expenditure may be made on the formation of the instrument 
without moving it at all, or moving it but a short distance, 
towards the orders of slower return. Sometimes the same 
expenditure that gives eJHiciency to instruments, partly also 
increases their durability, and partly quickens their exhaustion. 
Thus, the majority of roads in North America, and in many 
other countries, are constructed altogether of the soil of wliich 
the surface happens to consist, arranged in a form adapted to 
the purpose. Such roads, unless in the best of weather, are 
very inefficient instruments in facilitating transport, and their 
durability is so small, that they are probably reconstructed, by 
repair, every four or five years. A road formed of small 
fragments of stone, in the manner that is termed macadamiza- 
tion, costs perhaps twenty times as much, but is both a far 
more efficient, and a far more durable instrument. Besides, 
however, being more durable, and efficient, the facility it gives 
to transport occasions an increase of transport, and its exhaus- 
tion is thus quickened. For example, the capacity of a road 
of this sort, may be adequate to the transport of two hundred 
thousand carriages ; if this be spread over twenty years, it will 
be an instrument of much slower return, than if, in conse- 
quence of the annual transport being do\ibled, that number 
pass over it in ten years. 

As efficiency and durability are frequently produced by 
the same means, so, it sometimes happens, that the means 
which would add to the one, cannot be employed, without 
diminisliing the other. Thus there are many tools and uten- 
sils, that cannot be made very strong, and therefore durable, 
without being at the same time clumsy, and inefficient; and 
they cannot be made very light, and easy to work with, with- 
out being also of little durability. The difficulty in the 
combination of the qualities of durability and efficiency in the 
same materials, can only, however, be considered as absolutely 
limiting the capacity of those instruments, to support the 
weight of which, a corporeal exertion is required ; and is con- 
sequently confined to wearing apparel, and to those tools, and 
utensils, which are altogether moved by the hand. When the 
weight rests on some firm basis, it can be poised ; and, by the 



OF TECHNICAL LIMITATIONS 49 

application of sufficient expenditure, friction can be removed. 
The circumstance of the qualities of durability and efficiency, 
depending on the same materials, has therefore, probably, on 
the whole, the effect of retarding somewhat, though not very 
greatly, the progress of instruments as greater capacity is given 
to them, towards the more slowly returning orders. 

The various powers of the material world, seem to be con- 
nected at some common centre, and its several parts to exercise 
reciprocal influences on each other. Hence, a discovery of 
new properties in any one material, or more easy modes of 
bringing the old into play, generally extends the power of man 
over a great range of the other materials, which he had been 
in the habit of before applying to his purpose. When art, 
therefore, has made considerable progress, and comprehends 
within its dominion a multiplicity of materials, the variety of 
effects that may be generated, from the action, and reaction, on 
each other, of the numerous powers at its disposal, becomes 
illimitable. As in numbers, every addition multiplies amaz- 
ingly the possible antecedent combinations, until at length the 
.amount becomes too great to be ascertained. Hence it is, 
that, though among barbarous nations the ability of man to 
increase the amount of instruments he possesses may be 
[narrowly] bounded, among nations having made considerable 
.advance in art, there seems no assigning any limit to it, other 
than that indicated in the second part of the proposition, 
the necessary gradual passage of the instruments constructed 
to orders of slower and slower return. 

It is hence, that, if we turn to any community where art 
has advanced, we invariably see, that however much industry 
may have already exerted itself on the materials within its 
Teach, the field for its possible future action seems rather 
increased than diminished, and that the farther we stretch our 
view over it, to the greater distance its extreme circumference 
recedes from us. The industry of the people of Great Britain, 
has probably been as largely applied to the materials which its 
limited territory possesses, as that of any other community 
presently existing ; yet certainly there is no lack of matters 
on which it might be farther exercised. A large portion of 
its surface, and which wants not all the requisites for the 



50 OF TECHNICAL LIMITATIONS 

sustenance of vegetable life, lies, nevertheless, yet uncultivated. 
With tlie exception of the mountainous and rocky regions, 
heat, light, air and water, in sufficient abundance rest on every 
part of it, nor is the presence of many of the earths, the 
mixture of which forms a proper shelter for the tender radicle 
fibres, and a commodious storehouse for an important part of 
their nourishment, any where wanting. There is also in 
general a considerable supply diffused over the surface of the 
decomposing remams of former vegetables and animals, the 
material which constitutes nearly the whole solid food that 
the organic life of plants requires ; and, even when this is 
deficient at one point, there are larger collections of it at some 
other. The outlay requisite, in many instances, to give such 
form to these materials, as to fit them for the purposes of the 
agriculturist, would, no doubt, be very great ; still, whatever it 
might be, as the instrument formed would be of unlimited 
duration, the annual returns from it would, in time, exceed 
the cost of formation, and bring it within the limits of our 
series. 

Were we to go over the various other instruments, the 
returns from which supply the wants of this community, we 
should perceive, that every where their capacities are capable 
of being greatly increased. One would not find it very easy 
to say, how much might be added to the durability and effi- 
ciency of dwelling-houses alone. The amount of the capacity 
for the facilitation of future transport, which might be 
embodied in railroads, returning ultimately much more than 
the cost of their formation, is incalculable ; as is also, the 
degree to which mining operations might be extended. Even 
supposing all these, and many other instruments, to have 
acquired a vastly increased extent, both as concerns durability 
and efficiency ; instead of limiting their farther increase, it 
would seem likely, rather to open up a still wider space, for the 
exertion of future industry in the formation of others. Were 
the soil universally cultivated, were railroads extended and 
ramified throughout the country, and were the riches of the 
mineral kingdom more fully brought out, the additional facility 
given to the formation of instruments, by the command 
afforded of the materials necessary for their construction, and 



OF TECHNICAL LIMITATIONS 51 

the ease with which they might be transported from point to 
point, would, it may well be supposed, be sufficient to give the 
means of a still greater increased construction of them, and a 
still farther advance of the amount of the capacities for the 
supply of futurity, embodied in the various instruments spread 
over the surface of the territory, or lying above, or beneath it. 
In short, the more we consider the subject, the more clearly 
shall we perceive the impossibility of fixing any [absolute] 
limit to the amount of the labor which may be expended in 
the formation of instruments, in this, or any other community, 
where art has made considerable advance. 

This progress [that is, mere extension of industrial opera- 
tions], while art itself remained stationary, would, however, 
undoubtedly, gradually carry instruments to more and more 
slowly returning orders, and would not therefore take place, 
unless the society were inclined to construct instruments of 
those orders. What the circumstances are, which determine 
individuals and societies to stop at this or that order of instru- 
ments [in any given state of the arts], will form the subject of 
the next chapter. 



[Rae does not develop fully in this chapter, or indeed anywhere else, the 
bases for a generalized concept of diminishing returns. One additional aspect 
of the subject is brought out in the second paragraph of Chapter VII.] 



CHAPTER VI. 

OF THE CIRCUMSTANCES WHICH DETERMINE THE 
STRENGTH OF THE EFFECTIVE DESIRE OF ACCUMULATION. 

It has been shown, in the preceding chapter, that, in com- 
munities where an extensive knowledge of the materials within 
reach of the industry of their members has generated numerous 
arts, we can assign no limit, in the nature of the materials 
themselves, to the capacity for the supply of future wants that 
might be given to them : but, that the instruments so formed, 
pass, by a gradual and uninterrupted progress, to orders of 
slower and slower return. It is scarcely necessary to observe, 
that the increase to the capacity which may be given to in- 
struments, cannot be restricted by inability to devote additional 
labor to their construction ; for, as all instruments at the 
period of their exhaustion return more than the cost of their 
formation, they give the means of reconstructing others, return- 
ing also somewhat more largely than themselves. There are, 
nevertheless, in every society causes [not physical or technical] 
effectually bounding the advance of instruments to orders 
capable of embracing a larger and larger circle of materials, 
and the determination of those causes is the subject now 
claiming our attention. 

Instruments are all formed by one amount of labor, or some 
equivalent to it, that is, by something either capable of yield- 
ing, or itself constituting some of the necessaries, conveniences, 
or amusements of life, and they return another greater amount 
of labor or its equivalents. The formation of every instrument 
therefore, implies the sacrifice of some smaller present good. 



THE EFFECTIVE DESIRE OF ACCUMULATION 53 

for the production of some greater future good. If, then, the 
production of that future greater good, be conceived to deserve 
the sacrifice of this present smaller good, the instrument will 
be formed, if not, it will not be formed. According to the 
series in which we have arranged instruments, they double the 
cost of their formation in one, two, three, etc., years. Conse- 
quently, the order to which in any society the formation of 
instruments will advance, will be determined by the length of 
the period, to which the inclination of its members to yield up 
a present good, for the purpose of producing the double of it 
at the expiration of that period, will extend : according as it 
stretches to one, two, three, twenty, forty, etc., years will the 
formation of instruments be carried, to the orders, A, B, C, T, 
n, etc., and, at the point where the willingness to make the 
sacrifice ceases, there the formation of instruments must stop. 
The circumstances, therefore, on such occasions governing the 
decision of the members of all societies, must be the causes, 
fixing the point to which the formation of instruments may in 
any society be carried, and beyond which it cannot advance. 
The determination to sacrifice a certain amount of present 
good, to obtain another greater amount of good, at some future 
period, may be termed the effective desire of accumulation. All 
men may be said to have a desire of this sort, for all men 
prefer a greater to a less ; but to be effective it must prompt 
to action. 

Were life to endure for ever, were the capacity to enjoy in 
perfection all its goods, both mental and corporeal, to be pro- 
longed with it, and were we guided solely by the dictates of 
reason, there could be no limit to the formation of means for 
future gratification, till our utmost wishes were supplied. A 
pleasure to be enjoyed, or a pain to be endured, fifty or a 
hundred years hence, would be considered deserving the same 
attention as if it were to befall us fifty or a hundred minutes 
hence, and the sacrifice of a smaller present good, for a greater 
future good, would be readily made, to whatever period that 
futurity might extend. But life, and the power to enjoy it,, 
are the most uncertain of all things, and we are not guided 
altogether by reason. We know not the period when death 
may come upon us, but we know that it may come in a few 



f.4 I'm: i-:kkk( riVK dksikk ov acxmtmulation 

ilays, und imist toiiu^ in a l\>\v vt^ais. W'liv IIumi 1>o |M(>\ idinj^ 
goods tluit cumiot l'i> otijoycd until (iiiios, whuli, lliough not. 
vory roiuoto, iiuiy nover vonxc lo us. of until tinios still luoro 
vtMnott>. and uhirh \\v iwc conviiut'd \vt* shidl ntnov s(hW If 
iil\\ toi>, is oi" unctMlain duiatioii and tlu> tinii^ that, dtvitli 
(H)int^a l)ot\vt>tni us and all our pO!Ssossi«>ns unknown, tlui ap- 
proaolu>s of old as^i^ nw at Uvist corlain, and nw didlinj^, day 
l»y day, tho ndish o( ovciv jiKnisuro. 

A luoru I'oasonabU^ ft^gard to tlioii- own inltnt^st, would, 
thorot'oro, place tho l>l•(>st^nt V(>iy I'ar ahovo llio I'uturo, in th(^ 
t*stiinatit)ii of uuust uion. r>ut, it is l)t>siilo8 to l»o nnnarkoil. 
that such pU''asun>s as may now lu^ oujoycd, goiKMally awak(>n 
a passion strongly pionipting lo [\\v partaking of thoin. Tla^ 
actiuU prostMJCo of llu> iinnicdiato ohjoct of lU^sivt^ in the niiiul, 
by exciting the attention, stvnis to l•ons^^ all tho faculties, as it 
were, to ti\ their vitnv on it. ai\d K\ads llu>iu to a very lively 
i'onrt>i>lii>n (if tho oujoynicnls wliirh it ollois to thoii' instant 
posst>ssii>n. Tho prospects of future good, whii'h future years 
may hold out to us, seem at. such a monuMit dull and »luhious, 
and arc a[>t to ho slighted, for ohjocts mi whirh I ho daylight is 
falling strongly, antl showing us in all tlu>ir freshness just 
within our giasp. TluM-t^ is no man poihaps, to \vht>m a 
good ti> bo onjoytMl to d;iy. would i!t>l s(>imu o( \oiy dillerent. 
iniportaniH\ fioui one oxaiily smiilai' to ho onjoyed twelve 
years hence, intMi though llu' arri\al of both wt>i'e etpially 
certain. 

Nor, while wt> retain any t^tiste for pleasuws, is it tvvsy tt> 
jn-est'ribe limits lo tht> t>\tent to which \vt> may indulge in 
tlunn, ov to ilu> ;nuouni oi the funds tlu\\ may absorb. Every 
where we see that to spend is easy, to spare, hard. Kvery one 
indeed l(>oks \\\ton tln>se in tlu> rank immediattdy above him, 
as n>lling in supertluous extravagance. lUil, in every rank, 
from the prince to the peasant, tlune are ^ery many indi- 
vi(.luals, who havi> ditVu'ulty in procuring funds to defray the 
cost of articles, the expenditure o{ whieh they look upon as 
necessary to their comlition, ami. for the riMuainder, in the 
ditVereut. (dasses, who have nu>re than their utmost real ilesires 
would call for, pltvisure is so entwined with extravagance, in 
the fiMius in whiih slui prt^siMits herself to each, that it is 



TifK KFFi'xriiv]-: Di'isjiu': OF Af:f:(;Mr;i.A'rfON 55 

dif'f.oull fully i<> <;ni\ii ■■),<;<■ l\i<y on';, wilfionl (■/)iii\n'^> 7/iUjirj the 
circle of Ih'; oU)';r. 

ft woul'J Un'ji ■.i,\)\)CM,r, Uial tii<-A<-\y \)''AW)Uh] conriidorations, 
can f)(;vf;r fj;iv(; f.m;at/ Hin-.w/Ui i<> l\i<- <'Si'<-/-X\v<'y <\fMr<i 'A' a^/jurnu- 
);U.tfjn. A Ui\Air<; u,'>'i'^, ''-^^ i-jjii'-j-jdh liio mdividiial, whon 
l;alafjo(;'l it/^jiAirrX a prcHf^nty good, in holfi axc/'Jiditi'^riy uncertain 
in 'tH arrival, and in tlj<i amount of ('A\y)yi(i<'jil it rnay yield, iw 
probahly far inferior. Sueh f;on;;iderationH v/oul'J urjdoubte^ily 
rej'reHent it, an a great lolly to deny youtfj or rnanfjood plea- 
Hun;, tfjat old age rriigfit have rieljeH not to be enjoyed by it, 
bit wfiieli, Ilk'; t}i<; i';j,bled rrjonnter in the garden of the 
HeHfjerideH, it njunt eni[jloy itnelf v/ith reHtlcBB care to guard 
for otherH, 

" ( 'oiiHhrvfUiH aliio, quse periere «ibi 

Hicuf. ill auricorniH pf;ndf;utia, plurimiiH hortiH 

i'i:rv'u/U (AiHdrvht iiou huh. porna draoo."' 

A [»rudent calculation of njcr'-. [jf;rHonal cnjoyrucJit, could 
prompt to nothing more than a fjrovi;;ion for nelf, and would 
only lead to the making, an it in naid, the day and the journey 
alikf;, and taking care tfiiit youth Hhould not want pleanure, 
nor' old age comfoi't. ]5ut, an paBHion jh ever getting the 
better of more pnidence, thin limit would (tvcj-y now and then 
be. excfjfjded, and in nurnerouH inntaneeH, the Batiety of riot 
would ljf; Hucceeded l^y the mij^ericH of want. Wh<;rever a 
large aniount of m';anH for the gratification of tfie preHcnt 
cxiBtf/l, they woidd l^e H'juafidered, and no one, on the otfjcr 
Pianri, wr^nld Ijc inclined to make any great Hh/^niUxi of the 
prcHcnt, i'or the [iurfKx-;e of providing for the future. The 
Ktrrjngtb of the effective denire of accum(jlation would be 
low, and only in'itrumcntH woidd IfC formed a~; wen-, of the 
quifikly returning orderp,. 

liut man'H jileaHurcH are not altogether KclfiHii. He receives 
pleaBun; from giving pleaBure, and is far from the perfection of 
hiB exiBtence wlir^n he docB not draw IjIb enjoyrnentH, rather 
from the good he communicatCH, than from that which he 

^C. C. Oalli, /!?/!';,7. J. 'i'hf; whoks elegy JH illuHtrativft of that JHolation of 
fe«ling and action, ari'l coriKequent individual rniHcry and general weakneOB, 
tliat p':rva'l<;d the JOrripirc ;i,t the time. 



56 THE EFFECTIVE DESIRE OF ACCUMULATION 

reserves. Without the ties which bind hiiu to others through 
the conjugal and parental relations, the claims of his kindred, 
his friends, his country, or his race, life would be to most nen 
a burden. These are its great stimulants, and sweeteners, 
giving an aim to every possible exertion, and an interest 
to every moment. If, sometimes, they shadow our being with 
cares and fears, those passing shadows but prove there b a 
sunshine. The light of life only disappears, and its dreary 
night then commences, when we have none for whom to \we. 
Then the whole creation is a void. Really to live is to 
live with, and through others, more than in ourselves. To do 
so we must do so truly. 

" Love, and love only, is the loan for love." 

If the mere pretence deceive others, it mocks and tantalizes 
ourselves, encircling us with a joy as unreal, as that which the 
looks and tones of affection shed round him, who receives them 
disguised in a borrowed garment. We cannot enjoy them, be- 
cause we feel that they are not ours, but some other's whose 
dress we wear. 

In so far as to procure good for others, gives a real pleasure 
to the individual, he is released from that narrow and imper- 
fect sphere of action, to which his mere personal interests 
would confine him, and the future goods which the sacrifice of 
present ease or enjoyment may produce, lose the greater part 
of their uncertainty and worthlessness. Though life may pass 
from him, he reckons not that his toils, his cares, his priva- 
tions, will be lost, if they serve as the means of enjoyment to 
some whom he may leave behind. These feelings, therefore, 
investing the concerns of futurity with a lively interest to the 
individual, and giving a continuity to the existence and pro- 
jects of the race, must tend to strengthen very greatly the 
effective desire of accumulation. There would seem to be 
no limit to the possible extent of their operation. The more 
powerful and predominating they become, the greater must be 
their influence. It is true they are often feeble, and oppressed 
by other principles, and it is just as true that the world is full 
of deceit, hollowness, and unhappiness. As far as they exist, 
however, they form a real element of great power in the 



THE EFFECTIVE DESIRE OF ACCUMULATION ST 

determination of the course of human action, and one the nature 
of which would seem to indicate, and experience to prove, 
to be of great influence on the particular part of it that forms 
our present subject. In the succeeding pages, the terms, the 
social and benevolent affections, will be employed to denote them. 

The strength of the intellectual powers, giving rise ta 
reasoning and reflective habits, forms another important 
element in the determination of the course of human action. 
These habits in opposition to the passions of the present hour, 
bring before us the future, both as concerns ourselves, and 
others, in its legitimate force, and urge the propriety of 
providing for it. Although therefore, were our cares limited 
altogether to ourselves, the greatest strength of the reasoning 
faculty could prompt to but a very limited operation on 
the events of futurity, yet, the farther they extend to others,, 
the wider is the circle of operations that we are led to 
embrace. These two principles of our nature, the social and 
benevolent affections, and the intellectual powers, serve indeed 
mutually to move each other to action, the affections exciting 
the intellect to discover the means of producing good, the 
intellect opening up a channel to the affections by giving the 
power to do good. 

All circumstances increasing the probability of the provision 
we make for futurity being enjoyed by ourselves or others, also 
tend to give strength to the effective desire of accumulation. 
Thus a healthy climate, or occupation, by increasing the pro- 
bability of life, has a tendency to add to this desire. When 
engaged in safe occupations, and living in healthy countries, 
men are much more apt to be frugal, than in unhealthy, 
or hazardous occupations, and in climates pernicious to human 
life. Sailors and soldiers are prodigals. In the West Indies, 
New Orleans, the East Indies, the expenditure of the inhabi- 
tants is profuse. The same people, coming to reside in the 
healthy parts of Europe, and not getting into the vortex 
of extravagant fashion, live economically. War, and pestilence, 
have always waste, and luxury, among the other evils that 
follow in their train. 

For similar reasons, whatever gives security to the affairs of 
the community, is favorable to the strength of this principle. 



58 THE EFFECTIVE DESIRE OF ACCUMULATION 

In this respect the general prevalence of law and order, and 
the prospect of the continuance of peace and tranquility, have 
•considerable influence. 

These seem to be the chief circumstances, determining the 
relations between present and future good, in the minds of 
those in any society, who have a mind and a will, at the time 
they are forming habits. When habits are once formed, they 
regulate the tenor of the future life, and make slaves of their 
former masters. There are, however, in every society, very 
many who form habits, and pursue a certain line of conduct 
through life, not from any reasoning or choice of their own, but 
hurried on by the example of those around them, and the 
general direction in which the current of feeling and action 
sets throughout the whole body. It is evident, however, that 
the power that moves and directs the mass, lies not in them, 
but in those who govern their conduct in whole, or in part, by 
their own feelings and passions, and the reflections which 
the situation of circumstances around them suggests to them. 
These form the great moving principle, the others, like the 
balance-wheel in an engine, merely keep up, and give uni- 
formity, to the motion they generate. 

The desire to accumulate would then seem to derive strength, 
chiefly from three circumstances. 

1. The prevalence throvighout the society of the social and 
benevolent affections, or, of that principle, which, under what- 
ever name it may be known, leads us to derive happiness from 
the [future] good we communicate to others. 

2. The extent of the intellectual powers, and the conse- 
quent prevalence of habits of reflection, and prudence, in the 
minds of the members of the society. 

3. The stability of the condition of the affairs of the society, 
and the reign of law and order throughout it. 

It is weakened, and strength given to the desire of immedi- 
ate enjoyment, by three opposing circumstances. 

1. The deficiency of strength in the social and benevolent 
affections, and the prevalence of the opposite principle, a desire 
of mere selfish gratification. 

2. A deficiency in the intellectual powers, and the conse- 
quent want of habits of reflection and forethought. 



THE EFFECTIVE DESIRE OF ACCUMULATION 59 

3. The instability of the affairs of the society, and the im- 
perfect diffusion of law and order throughout it. 

The reader may perhaps conceive, that, in enumerating these 
different circumstances, and deducing the strength of the 
effective desire of accumulation from the preponderance of the 
one class over the other, I am attempting an unnecessary 
refinement, and that the principle of a regard to self interest 
alone, though it may not, of itself, give great strength to this 
•desire, yet, from its combination with other springs of action, 
must generally do so indirectly and ultimately and may, 
therefore, be assumed as a cause sufficient to account for the 
phenomena. If we confine our attention to the present times, 
and to particular parts of the globe, this may be readily 
admitted. Now, and in those places, a prudent regard to self 
interest would doubtless prompt many individuals to cooperate 
effectively in the increase of the general means of enjoyment. 
But there is nothing more apt to mislead us, when investi- 
gating the causes determining the motions of any great system, 
than to take our station at some particular point in it, and, 
examining the appearances there presented to us, to suppose 
that they must be precisely similar through the whole sphere 
of action. Because, in Great Britain, a regard to mere self 
interest, may now prompt to a course of action leading to 
making a large provision for the wants of others, we are, in 
reality, no more warranted to conclude that it will do so 
always, and in every place, than were the ancients warranted 
to conclude, because in their particular communities, the pur- 
suit of wealth commonly generated evil, that it must therefore 
do so always and in every place. 

There seem to be, in modern times, and in particular com- 
munities, two circumstances, that may lead an individual, from 
a mere regard to his personal interest, to pursue the paths of 
sober industry and frugality, and, consequently, to make an 
extended provision for the wants of others. These seem to be 
the desire of personal, and family aggrandizement, and a wish, 
conjoined with the pursuit of both, to rank high in the 
estimation of the world. The acquisition of fortune, is a road 
open to the ambition of all men, and, in the present days, is 
the only road open to that of most men. The mere desire to 



(10 TlIK 1:1 FECTIVE 1)I<:SIUK OF AC(nTMlTLATI()N 

rise ill the vvDild, uiul envy of llu^ .sui)i>iioiit y of otlicr ukmi, 
may excite many to enter on Uiis ])iitli, ami ])iosorvo them 
stomlily in it. This sort of siiirit, ht)vvovtM-, nuust ho ko})t in 
strict chock, by 11 largo siirroniuhng mass of <^onuino prohity, 
and ((Mulornoss of tho happiness of others, or it certainly hreaks 
ont into (hsorilers.^ There is lunie more easily tem])teil to evil, 
or more ilangerous. It is the lirst to diminish the secnrity of 
all compacts, ami transactions of business, by fiaml and ex- 
actions ; it is tlu^ tirst to disturb tho public tram|nillily. by 
seditions and conspiracies. It is such a s])irit, ])reiloniinatin«; 
over a character otherwise good, that Shakspeare paints in 
Cassius. Ca>sar thinks him to bo feared, because, 

" Siu'h mon aa ho bo never at heart's oa.so, 
While thoy behold a greater than theniaelves ; 
And therefore are they very dangerous." 

It is this tem]ier that s])urs l\im on, " in envy of great 
Ciesar," to "humour, ami win, I be nobU> Brutus," to the 
assassination. It is the same spirit, that renders him un- 
scru]mlous, 

"To st^ll ami mart his tillii-os (ov gold, 
'1\) umlivsiMvors ;" 

and, to wring 

" From tho hatd hand of peasants, their vilo tra.sl>, 
\W any iniliriHtion." 

Whenevci-. tbereforo, tbe www desire of distinctitm is the 
object for which wealth is giMunally pursued, thert\ the pursuit 
infallibly, at length, withdraws from the ]»ath of virtue, and 
excites those engaged in it, to a tlisrt\gard of tbeir own honor, 
and the sidVeiing of others. 

'' Magnum pauporios op]n'obi'ium jubot 
Quidvis ot fai'oie ot pati, 
Virtutiscpu' viaui iK-sorit ufilun\" 

Wiien such is the characttu- of only a small minority of 
those who pursue wealth, it is not injuriously felt. The 

'[.\ro wo not oxporiom-ing just sinli an outbreak of "disorders" in tho 
phouomona of Trusts and got-riili([uick sohouios, and "graft" of all sorts, at 
tho prosfut day ?| 



THE EFFECTIVE DESIIIE OF ACCUMULATION Gl 

energy of their motion, ratlier (jiiiclconH tlio f)rogreHH oi tlie 
whole, than retards it. It m vcaj dil'Cerenl/, when suoli 
characters compoBO the inajority of those engaged in hucIi 
])iirHuitH. A eliaoH of deceit, treachery, knav(;ry, m then 
generat(Mi, in wliicli truth, generosity, good faitli, coujpassion, 
]:)eri8h. Hence it was, that the pursuit of wealth, in ancient 
times, was held as absolutely iiicom])atil)le with tlui lowest 
degree of liberal sentiment, virtuous s])irit, or common honesty. 
I'lato expressly says, that in commerce and traffic there is no 
such thing as an }ion(ist man, and numerous passages from the 
(Ireek an<l itoirian writer's might lie cit(id in ])roof, that, in 
those days, it was iulmitted on all hands, that the character of 
the mon(;y-making man was unifonrdy vicious. The following 
is one of the most striking 1 ean ])r'OH(;ntly jind. 

" It is impossible for the same man to be given to sensual 
])l(iasur'(is, and to the love of money, and to he religious. For 
ho who is a lover of pleasure will ]je a lover of money, and he 
who loves money, must of necessity be unjust, and a violator 
of the laws of God and man." ^ It is here not thought 
necessary to give any proof of the assertion ; on the contrary, it 
is taken as an admitted fact, from which a consequence may 
be deduced. 

in those times, therefore, the pursuit of wealth was disre- 
putable, and the self-love of no one could be gratified by the 
character it pT'ocured him. We are apt to conceive the obser- 
vation of St. l*aid, that " the love of money is the root of all 
evil, and infallibly leads to wickedness," as springing from the 
ascetic spirit in whi(;h he contem])lated matters, whereas it is 
common to him with all the moralists of his time, even with 
the most liberal of them, and must be held as a mere statement 
of what was then an obvious fact. Thus Horace calls it the 
same thing, " summi materiam mali," and the voice of the 
whole age agrees with him. An assiduous care to the increase 
of fortune was then esteemed evil, and the source of evil, and 
was reprobated accordingly. It was evil, because generally 

' '0 (jiL\'f)5ovov Kdl (jtiKoailiixaTov kuI ([iiKoxp'OfJ^o-Tov ical ^hXSOcov rbv atjrbv dMuarov 
elvai 6 yap <l)CK'q5ovo% kuI (/n'Koaib/j.aTOi 6 od (piXocrcofxaros Trai/rws Kal (jiiKoxp'i'iiJ.aTos. 
'0 5^ cjiL\oxp7)ixa.Toi i^ dvdyKTjs doiico^. '0 Si doiKos cis fidv Oiov dvLatoi ch bt dfOpuj- 
TTous tvapdvo^ios. DemojjkiLi iSimUitudines. 



t)2 TUK KlM'Kt "I'lVK DKSIKK OF ACCTMrLATION 

puH'tHHliug from u uiuspiui;-, sonliil, si^ltish t<[)iiit. It was tlu> 
simivo of ovil, bootiusc tho git^ut oxi'itor ol' I'niml, knavery, ami 
violence. It is in mow uioimI (•oiunnitiitirs aK>iu\ whore the 
real springs et' action are not st>ltish, and whtne a desire for 
the y[,ood of others is ont^ of the ehief movers, animating the 
exertions, and giving a tone to the feelings and at'tions of the 
whole body, that the virtuous and liberal nund, sympathizes 
with and approv(»s tlu> eonduet of the man, who gives his days 
to labor, and liis nights lo iMigrossing care, for the purpose of 
increasing his gains. 'riu>rt>, such a lil't^ is not ileemed st>ltish, 
sordid, ov untiap[>y, because tliere, it is known generally to 
proi'ced from a tt)tally opposite spirit, and to have for its sus- 
taining principle, the welfare of others, rather than of the 
imlividual ; ami there, it is esteemed praiseworthy, because 
there, its general ttMuUnu'v is gootl, not v\\\. There, too, 
ambition alone may, no doubt, lead those who want other 
motives into the paths i>f sober industry and frugality, because 
the desire of excelling in whatever is attempted, nmst impel 
individuals actuateil by it, to every pursuit that other men 
gain croilit by. It is not perhaps the i»bjeet gained, so much 
as the gaining of it, wiiieh >j,i\es it^ value in tlunr eves. l>ut. 
it is only whore such conduct procmes consideration, and 
respect, that we can expect it will be steadily pursued by such 
persons. AVhere patient and assiduous industry, and nn- 
deviating integrity, procure the higliest name, and fame, they 
will be folUnvetl by many who value them not in themselves. 
Tnit tliis obsiuvation only jn-oves, that wc have to seek t\>r the 
general course of action of tiie iniliviilual. in the circumstances 
determining that of the society. 

In modern tinies. again, ami in particular connnunities, mar- 
riage and i>U'spring, and the consequent desire of family 
aggrandizement, may often succeed in imposing on those, to 
whom the welfare o( otluMs is naturally of little moment, the 
necessity of providing for that welfare, and therefore may often 
gtnierate and keep up a umch stronger attention to the cares 
of futnrity, than lould be excited by a mere regard to self 
interest. But, it is to be observed, that the mode in which 
the passions pron\pting to marriage will operate, must depend 
on the feeling's, ami consequently, manners, pervading tho 



THE KJ"J'K(;TIVE DESIllK 01 ACCUMCJ.ATKjN m 

HociVity. Wh'uj the goneral fcolingB and rnoralH Ixic/jma oor- 
rujjt, tiinnbi'Mt, v/jjj uevcr he Koiight afler, hy men in cany 
circurrwtanc(iK, for th<i rrjerf; pleanures of seriBe, 8f>crate8 re- 
ffjarkH l/hJH to hJH Hon, when pointing out the ohJigations he 
owfj'i ijiia j'or giving in'm heifjg ' and every pure voluptuary in 
ready to curse, with Eloiwa, "all fiuraan tien." 

Tiie indulgeneeH to wiiiei) tljene pasnionB pronjpl, wiien the 
feeh'ngH heeonje purely Helfinh, will, indeed, I HUHpfif;t, he found 
to h(; the great weakeners of thin very jmnciple. Out of the 
i/eart are tfje isBueB of life, and the evils to whieh tliey give 
r-JHe art} the worst of any, heeause tiiey eontarninate the Bouroes 
of alJ h';;j,ltjjy <-ii<-j'!j-y and activity, at the vary fountain head. 
It in to them, tliat iforaee, in my opinion, truly traces, the 
load of ifjisfihief wijieh in Ijis time pressed on itome, and which 
finally overwhelmed }i(;r ; 

" I'V/;ufida dilpiifi sfjf;ulu nuptiaw 
l/rimura inquiaavftr*} at geriuH et domoH; 
Hoc fonte derivata cLadew 
Inque patres populumque fluxit." 

i^ven on the supposition of legitimate offspring, it is only irjt 
countries where the general sentiment applauds tljat course of 
actiorj, tljat tfje nmn actuated hy mere self interest, can he sup- 
posed to pride himself on rearing up and providing for a 
farrjily, in preference to enjoying, without restraint, all the 
pleasures he may he ahle to procure. Cool, calculating, self 
interest, would thus speak. " Wlio knoweth whether his son, 
shall he a wise man or a fool ? Vet shall he liave rule over 
all his lahor, wherein }je liath lahored, and wherein he hath 
showed himself wise under the sun. This is also vanity. 
Whereof I perceive tliat there is nothing, better than that a 
man should rejoice in his own works : for tliat is his por-tion : 
for who shall hring him to see what shall he after him : it is 
gofjd and comely for one to eat and to drink, and to enjoy the 
good of all his lahor that he taketli under the sun, all the days 
of his life, which God giveth him, for it is his portion." We 



' Kal jjj.i/ (111 tCov 'jr. 6.'li\)<ihi.niijiv '/.vi.k'j. ir()xo<jir'ji.f'LTO'u r(i!n d.udfiilnrou'i ijTT'tXaiJ.ftd.vr.i.'i. 
iiTfA Tiirrtw yf: riijv d.mj'Kv'r/jt/Toiv imtt'j.i jiav at oooi jjaito. bi ro, 'AKriij/j.T'j.. X';noph. 



(U TllK EFFECTIVE DESIUF OF ACX^IMULATION 

tiiul {U'CKiilinLily that in states wlunv luero soltish tMijiniuoiit is 
the ehiol" piim-iple oi ui'tiou, that tho interests ef pt)sterity are 
neglocteil. Thus, among tlie lu>nuin writers, the heir is always 
represented in an inviilieus light, ami to save for him is re- 
presented as a l\»lly. The writings of lloraee, and the etin- 
temporary poets, throughout, exemplify tlie prevalence o( this 
t'ei^Hug. 

" rjuvus ol) liH'iiilis cumin — 
Assidet insano. — " 
For a frightful pietiire of causes and etVeets, in this particular, 
the epigram of JMartial to Titulhis beginning, 

" Ixnpe, congoro, aufor, etc." 

might be quoted. Hut, it is time lo conclude a digression, on 
which perhaps I ha\e somewhat, prematurely entered. 

"We shall then assunu^ that there are motives, as above enu- 
merated, derived from the principles of human nature, acting 
on all men, and exciting tluMu to expeml what they presently 
possess in pro\iding t'or fiiiure wants, as there are othere, 
derived from the same source, tempting them to lay it out in 
the gratification of their immediate wants. The strength of 
the efl'ective desire of accunndatiou, in any man or society of 
men, or this desire nianifested in action, is determined by the 
preponderance oi the one class of motives, over the other. It 
is manifesteil, and may be measnred, by the willingness of the 
indivithial, or individuals, to lay out a certiiin amount to-day, 
in order to produce the double of that amount at a period 
more or less remote, that is, at the expiration of one, two, three, 
etc. years. 

[In this chapter Kae docs not make sutticiently clear that it is a certain 
particular sort of regard for others — the desire "to endow the future" 
for them — which chiefly supports the accumulative principle. It is to be 
noted also that the phrase " social and benevolent atl'ections " has no speoitio 
applicability as a technical term in this connection. This very form of words 
lias been employed by one writer on economics to denote those traits of 
character which lead one to spend all in the present, entertitininjj one's 
friends, and the like. Tiie poorest people in any conununity are txs a rule 
good hearted and give freely to any one in need. This is one of the chief 
things which keep them poor. Individual seltishness enlightened by the 
reason plays a larger role iu economic life than Rive gives it ci-edit for. But 
his interest here being sociological rather tlian individualistic, he could 
hardly distribute his emphasis otherwise.! 



CHAPTER VII. 

OF SOME OF THE PHENOMENA AEISING FROM THE DIF- 
FERENT DEGREES OF STRENGTH OF THE EFFECTIVE 
DESIRE OF ACCUMULATION IN DIFFERENT SOCIETIES. 

The effective desire of accumulation is of different degrees of 
strength, not only in different societies, as compared with each 
other, but also in the several individuals composing the same 
society as compared together. Disregarding, however, for the 
present, the effects produced on the formation of instruments, 
from diversities in the strength of this principle among individ- 
uals in the same society, we are, in this chapter, to endeavor 
to trace solely some of those resulting from the operation of 
causes varying its strength in different societies. As has been 
already stated, there are three other causes operating in the 
formation of instruments ; the quantity and quality of the 
materials owned by any particular society ; the progress which 
the inventive faculty has made in it; and the rate of the 
wages paid the laborer. The first of these depending on the 
original constitution of the whole globe, and its different 
regions, and the correspondence between these and the cor- 
poreal system of man, is determined by circumstances, the con- 
sideration of which would be foreign to the present inquiry. 
With regard to our subject it is to be taken as an important 
but ultimate fact. The causes on which the progress of the 
inventive faculty seems chiefly to depend, will form the subject 
of a subsequent chapter. At present, the extent of that 
progress is to be received simply as a circumstance of ad- 
mitted importance. 

£ 



66 INTERNATIONAL DIFFERENCES 

The rate of the wages of labor, the last of the causes affect- 
ing the formation of instruments, though a subject of investiga- 
tion in itself highly interesting, and closely connected witli 
this whole inquiry, is not, as has been already stated, to bo 
otherwise considered in these investigations, than as an existing 
circumstance, the operation of which is also of importance in 
the determination of the extent to which the stock of materials, 
in possession of any society, will be wrought up by it, but the 
laws regulating which lie beyond our prescribed limits. So 
considered, a low rate of wages may be esteemed, in its direct 
effects, as producing the same results as an improvement in 
the quality of the materials operated on, or an extension of 
the power to operate on them, through an advance in the pro- 
gress of invention. All these cause the same returns to be 
produced from a less expenditure, or greater returns from the 
same expenditure. They all, therefore, place a greater range 
of materials within compass of the accumulative principle, and 
occasion the construction of a larger amount of instruments. 
The advance of invention, however, differs from a lowering in 
the rate of wages, in being a quantity to the increase of which 
we can set no bounds, whereas, we soon arrive at a limit to 
the possible diminution of the rate of wages. In the principles 
on which they depend, and in their ulterior consequences they 
differ, I believe it will be found, still more widely. 

The first example I shall take, of the effect of circum- 
stances in moulding the characters of comnnmities, and of 
these again, in determining the extent to which they carry 
the formation of instruments, will be that of the American 
Indian. 

The life of the hunter seems unfavorable to the perfect 
developement of the accumulative principle. In this state 
man may he said to be necessarily improvident, and regardless 
of futurity, because in it, the future presents nothing, which 
can be with certainty either foreseen, or governed. The 
hunting grounds are the sources from which, among hunters, 
the means of subsistence are drawn. But these belong to the 
nation or the tribe, which alone therefore, can make more 
abundant provision for futurity by securing to itself a domain 
more extensive, or better supplied with wild animals ; or meet 



IN ACCUMULATIVE STRENGTH 67 

poverty, by Ijeirig restricted to one more naiTow, or barren. 
As regards his future means of living, every member of such 
a community thinks of nothing but whether the supply of 
game will be plentiful or scanty ; in the one case, he knows 
that he will enjoy abundance, in the other that he must endure 
want. In such societies therefore, the view can never be 
directed to any distant future good, which present exertion 
may secure to the individual, but is confined to what, by that 
exertion may be added to the power, or the territory of the 
tribe. What applies to the individual hunter, applies to his 
family. Their comfort depends less on his particular exer- 
tions, than on circumstances affecting the whole band, or little 
nation, to which he belongs. It is only in infancy that the 
wants of the young savage are, to any great extent, provided 
for by his parents. Afterwards he feasts, or fasts, like every 
other member of the community, as abundance, or scarcity 
reigns in the camp. That camj), indeed, may be said to form 
the family of the Indian. His whole thoughts, and affections 
centre there, nor has he any cares for a distant futurity, either 
for himself, or his offspring, separated from the common suffer- 
ings or enjoyments of his tribe. 

Were the causes determining the future good or evil flow- 
ing to each of these great families, to be within reach of the 
energies of the individuals composing them, they would have a 
steady aim for their exertions, and having the means, might 
acquire the habit of purchasing future plenty and security, by 
present toil and privation, and of tracing out with certainty, 
remote consequences to immediate acts. But this is a mode 
of thought and action, to which the circumstances of their con- 
dition are opposed. As the utmost prudence, foresight and 
fortitude, can but little affect the future welfare of the 
individual, so, their power to promote the prosperity of the 
society, is limited and precarious.-^ 

If a tribe of hunters occupy a healthy territory, and one 
plentifully supjilied with game, they are pressed on by others, 



' [The foregoing should be compared with Rae's position on individuali&m, 
" family aggrandizement," and " social and benevolent affections," in the pre- 
ceding chapter.] 



68 INTERNATIONAL DIFFERENCES 

eager to seize on these advantages, and so are continually 
engaged in destructive wars. While the individuals compos- 
ing such a tribe can slaughter their foes, that is, the surround- 
ing tribes, or can drive them to a distance, they want for 
nothing. The defeat of their own tribe, is the only calamity 
they have to dread. This calamity is every now and then 
overtaking them. 

War is always a game of hazard. In such a state of society 
it is peculiarly hazardous. There the art of war is surprise. 
The scanty population which the chase can alone maintain, is 
divided into small bands, living widely apart — mere points in 
a vast continuity of wilderness. In such situations warfare 
can never be open. The attacking party must advance with 
secrecy ; were they to make their approach known, their 
enemies would only wait for them, if convinced of their own 
superiority ; otherwise, they would retire, and, if acting 
prudently and skilfully, never suffer themselves to be seen, 
unless to strike their foes, themselves being safe, in some well- 
'Conducted ambvish. But where success depends upon conceal- 
ment, and surprise, it also depends on chance. No precautions 
can succeed in always guarding a small band, encamped in the 
midst of a great forest, from being unexpectedly assailed. No 
precautions can prevent the track of a party advancing 
through an enemy's country, from being occasionally dis- 
covered. Victory, or defeat, and all that follow them, depend 
on the slightest accident. Fortune is a goddess, on whose 
influence the schemes of the most skilful and greatest captains 
are always in some measure dependent, but here she reigns 
supreme. 

The effects of these circumstances are increased by the 
character of the laws of war of the savage. His wars are wars 
of extermination. They cannot well be otherwise. Were he 
pressed to defend what he thinks requires no defence, but is 
prepared alike to execute on others or suffer himself, he might 
so do from the necessity of the case, — the plea which man 
always urges for every evil he inflicts on his fellows. He can 
neither safely let his enemies go, nor possibly retain them 
captive. In the former case they would be as much to be 
dreaded as ever, for in the woods half a dozen men may make 



IN ACCUMULATIVE STRENGTH 69 

war upon a nation, as wars are there conducted. That is, 
they may waylay, surprise, and slaughter detached parts. 
Nor can he retain captives, for they would both be use- 
less, and also must escape. A plunge into the surrounding 
forest sets them free. Hence it is not conquest, as with other 
warriors, but destruction, that is his aim, and what he executes 
on others, when he has the power, he sees continually im- 
pending over him, from them, when fortune gives them the 
power. 

Thus the whole existence of the hunter is chequered by 
quick changing extremes. Abundance, famine, the fierce joys 
of victory, the horrors of surprise and defeat, rapidly succeed 
each other, in an order which he can neither pretend to fore- 
see, nor direct. Like all men in similar circumstances, he 
refers the events, of which his being is the sport, to the con- 
tinual and capricious agency of supernatural powers. All the 
good that happens to him, is from their having been propitious 
to his designs, and from his having rightly interpreted their 
omens ; all the evil that befalls him, arises, in his conception, 
from their hostility, or from his having mistaken, or neglected, 
some vision or token they sent him. The warrior turns back, 
in the middle of an expedition, if his sleep be disturbed by a 
dream betokening evil ; the unsuccessful hunter accuses neither 
his unsteady hand, nor imperfect sight, but some magical 
influence hanging on his weapon, which only the priest or sor- 
cerer can therefore remove. The direction of all events whose 
arrival is distant, seems thus to the hunter of the woods 
to lie entirely beyond his control ; and, instead of endeavoring 
to make the ease, or abundance of the present, provide for 
the evils of the future, he prides himself in enjoying the 
good of to-day undisturbed by a single care, and in feeling 
and knowing, that he can bear the ill of tomorrow without a 
murmur. 

Hence the Indian has a character altogether his own. 
Feeling himself hurried on by the course of events, not direct- 
ing it, he thinks as little of refraining from the pleasures that 
course may offer him, as of shrinking from the pains to which 
it may expose him, and indulges, therefore, without restraint, 
in the enjoyments of the hour. His intellectual faculties,, 



70 INTERNATIONAL DIFFERENCES 

unaccustomed to deduce remote consequences from immediate 
causes, and still less accustomed to adopt as a ground for 
action, and to watch carefully, and anxiously, any concatena- 
tion of the sort, are feeble ; either in themselves, or from 
inaction. His passions, on the contrary, are strong. Un- 
accustomed to reflection, the warm and generous feelings of 
affection and gratitude, as well as the darker ones of hatred 
and revenge, are often formed hastily, and on inadequate 
grounds, but while they last they are exceedingly vehement. 
His tribe forms the point in which all these feelings centre ; it 
is in fact his family, with which all his joys and sorrows are 
in common. 

An attention to the effects naturally flowing from this 
character, will explain many circumstances in the present con- 
dition, and past history of these tribes, which are in them- 
selves interesting, and which are closely connected with our 
subject. Of all those circumstances, none is more remarkable, 
than their neglecting, or refusing, to adopt the arts of the new 
neighbors, which the discovery by Europeans of the country 
they inhabit brought, and has kept in contact with them. 
Surrounded as are the scattered wrecks of those once numerous 
tribes, by a great people, rapidly converting the soil, and 
almost whatever grows on it, or is hid beneath it, into instru- 
ments capable of plentifully supplying every variety of future 
want, they are yet unable to imitate them. This deficiency 
among them of the effective desire of accumulation, the prin- 
ciple leading to the formation of instruments, seems to arise 
both from a want of motives to exertion, and from a want of 
the principles and habits of action which would lead to effec- 
tive exertion. 

The settlement of their country by the European race, has 
in itself, gradually diminished, or entirely destroyed, the 
political importance of their tribes, and consequently, the ties 
binding together the members of each of these communities, 
and leading them to feel, and to act, in common. Nor have 
these been replaced by others. Those growing out of the 
family relations, in other states of society, — the anxious pro- 
spective care of the parent, and the exertions, the pleasures, 
and the duties thence arising, — have not had time to spring 



IN ACCUMULATIVE STRENGTH 71 

up. Hence the Indian continues to seek shelter in apathy, 
and to regard life and its enjoyments, both for himself and his 
children, as did his forefathers, gifts to be made the most 
of while they last, but which no care can secure, and which, 
therefore, it is his business not to provide for the continuance 
of, but to learn calmly to resign when called on. He thus 
sits, listless, in the midst of the incessant activity and in- 
dustry that surround him, incapable of discovering an adequate 
cause for the never-ceasing care and toil. The motives that 
excite the white man, though possessed of means that would 
enable him with his more needy brethren abundantly to enjoy 
the present, to devote himself, instead, to labors to which no 
season brings a respite, in order to bring about events that 
may provide for the wants of some remote and uncertain 
futurity, are to him incomprehensible. Instead of applauding 
the conduct, in his secret soul he censures the mean, timorous, 
and, as it seems to him, selfish spirit, which prompts it. 

But, besides a want of the motives exciting to provide for 
the needs of futurity, through means of the abilities of the 
present, there is a want of the habits of perception 
and action, leading to a constant connexion in the mind of 
those distant points, and of the series of events serving to 
unite them. Even therefore, if motives be awakened capable 
of producing the exertion necessary to effect this connexion, 
there remains the task of training the mind to think, and act, 
so as to establish it. 

These deficiencies in the motives to exertion, and in the 
habits of action of the Indian, serve to account for the 
condition of the remnants of the tribes scattered over the 
North American continent, in situations where they are in 
contact with the white man. There is a general similarity 
throughout, that will, I believe, render an example taken 
from one part of the continent, sufficiently illustrative of the 
state of the whole. 

Upon the banks of the St. Lawrence, there are several little 
Indian villages. They are surrounded, in general, by a good 
deal of land from which the wood seems to have been long 
extirpated, and have, besides, attached to them, extensive 
tracts of forest. The cleared land is rarely, I may almost 



78 INTKUNATIONAL DIITKHKNC'ES 

say m^vtn', cultivuttHl, iu>r avo any iiiioails miuUi in (h(> I'on'sl 
I'or Hiu'li H jmi'piistv 'VUo soil is, luntMlht^li^ss. I'mtilo. and Wino 
it. not, inaMUit^ lit^s in htnips by thtnr ln>usi's. Wtn't^ tnt^y 
IfUiiily (o ouiliisii l\all' an ai to iif grouml, till il. and plant in it 
potatoos ant! niaii-.t^, it would yioM a sutlirunicy ti> support. 
MuMu i»no liali" tlu^ yt>af. Thoy sulVrr too, tnory now and tluMi, 
oxtvonu^ want, insonuu-h that, joituHl to oiH'asioual intoniptn- 
aniH\ it is rapiilly loduiiiii;; thoir nuuduns. 'I'Ins, ti> us, so 
stmngt' apathy pnuHu^ds not. in any m'tvit dt\s;itM\ from vopug- 
naiu't^ to lahor ; on tlu^ i-ontraiy, thoy apply \oiy dili>;'ontly to 
it. wtuMi its rt^ward is inuutHliatt>. 'rinis, hositlos llunr ptH-nliar 
oiH'upatitMis ol' lundiui;" and tishini;', in whicli tht^y avo ovor 
roady to inii^am'. tlun' ai»* uuu'h oiiipK>y«Hl in [\\c na\igatiiin o{ 
tho St. La\vroniH\ ami may ho sotni lahoiin^ at tho oar. ov 
sottim;' with tho polo, in tlu^ lari;o lutats usoil for tho pnr]>oso, 
antl always I'uinish tlu> git>ator part (>t' llu> atlditiiuial handvS, 
lUH'tvssary to ot>ndut't raits through somo i>t' tho rapiils. Ni>i' 
is th^^ td>staoUi avtMsion to agrii-ulturjil lahor. This ivS no 
donht a projuiliio of tlunrs ; hut uumo prtj\ulicos always yiold, 
prim^plois i»t" ai^tion oannot ho oroatiHt. NN'iuno tho votnrns 
from agriiudtural lahor arti siuunly, anil grt^at. thoy avo also 
agvietdtnrists. Thus, sonu^ of Ww littlo islanils on lako St. 
Franins, noar tlu* Imlian \illagt^ of St. Kogis. aro favt»rahh> 
to tlu> growth of mai/.t\ a ]>lant yit^Uling a vt^tuvn of a hundrtnl 
told, jiud foiining, o\iMi w hou half iipt\a ploasant and suh- 
stantial rt^past. I'ati-lu^s of tho host land on thost^ islands aro, 
thort^foro, ovtny ytvir. oultivattnl by thon». iov this purpost\ 
As tlunr siluatu'ii itMidois (lu>in inari't>ssiMo to i\atllo. no fonoo 
is vtHpiirtnl ; wtnt^ this additional outlay noot^ssary. I susptn^t. 
thoy wouUl ho nogUn-tod. likt> {\\o ooumuvmis adji>ining tlunr 
villugo. Tlu^st^ had .apparontly. at ono linio, Iuhmi undt>r ivrop. 
Tho l•attU^ of tho ntnghhoring st^tlUns would now, lu>wovtM\ 
ilostroy any cn>p. not soi'un^ly ftnu^od, aiul this aiUlitional 
nwoasary i>ntlay. oonsoipiontly bars tluMr mdlurtv li it>uu>\t^s 
thtMu to an ordtn- of instruuuMits i>f sh»wt^r upturn, than that 
which oovrosponds t(> tlu> strt>ngth of tho t^tVootivo ilosiro of 
aocuiuul;ili»>ii, in this littK> st>oioty. 

It is horo dosorving of noliot*. that what instnnmnds of this 
aort tlu\y ilo form, aiv oomplott^ly fornuul. Tlu^ small sjn^ts of 



IN A(CITMITLA'riVr. S'lMlENGTH 73 

ooni l.ht\v cultival.c^ ji,i'i< tlioi(Hi}j;lily wc^tnldd juhI IkkmI. A litlJc^ 
ii(^<^'l(i(!l, ill |,|ii,s |>a,i't. would, indocnl, I'dduci* l.lui (irop V(ii'_y iiiucli ; 
(if UiiH (^xit(iri(Mi('(i \\iiH iimdo iJunii jxm I'dctJy ii\viu(\ iuid Mmy 
act accordingly. II. Ih dviddiiMy iiol, Mm iiocossary laJior, Mud, 
is Mici ohHl.fU'lti (.(> luiicli iiKtrci (^xl.ciiidcid I'.uK.uni, l»u(- Mui diHtaut 
nitiini from Mud. liiJxir. I Jini asHiirod, iikUhhI, Muii, iuiionj^ 
iMdiiiti (if Mici iu(ii'(^ i(Mii(i(.(i (<rili(^H, Mid l;ili(ir MiiiH o\|i(iiid('(l, niiicli 
oxcotidH Mud- j^ivcui by Mui whitos. 'VUo Miuim pdrMoiiH (iT 
jfi'diiud htMiij^' ('r(i|)p(Hl vvithouL icmiiMHioii, a,iid nuuiiird not, Ikmiiii," 
iiHiid, Mu^y would Hcarco yicild luiy ro(,iirii, woro iiol, Mio Hod 
iiioHt (•a.rc.fiilly l)rol<(Mi a,iid ])ulvoi'i/,o(l, liol.li wiMi l,ho lioo and 
Mio hand. In Hnt'Ji a. Hil.uaMon, a, whitu man wonld (;loa,r a. 
fresh pioco of gronnd. I(. wdnld |HMiui,})a scarce repay Iuh laJior 
Mio HthI, year, and ho vvonid liavo to look for his roward in 
MU(!00(Hling y(>ia,rs. On the Indian again, HucciuMling yoa,rH aro 
l.oo diHt,a,n(, to nutko auHicient inipresHioii, Miougli, l,o ohLaiji 
what la,hor nuiy bring a,hont in tho oourHo of a, f(^vv moid.hs, iio 
toils o\'(Mi niorii a,Hsiduoualy tluin tiio whito man. Tiio wagoH 
of labor with liim, are lowor Mum vvdJi tho vvhit(^ ma,n, for hJH 
wa,ntH ai'o fowor. I'nt for tluH, tho ranges of ma,t(uia.lH, ooiiiuig 
within voi\i']\ of bin oflbctivo doniro of a.o(Mimida.tioii, wonld bo 
ovon moro limittul than it i.s, and tlio a,iiiount of iiiMtrnmont-H 
fornuMl l)y Ivini, Iomm. 

Similar ohaorvatioiiH will iipply U) all tia^ r(^nnia,ntK of tiu^ 
race, scattered throngh tb(( paitu of tho North Ainorioaii 
continont, to which th(i iiuhiHtry a,nd oid,oi'])riHo of tho whito 
man, lutvo bidiight modcM'ii arl,H anil civili/.fd,ion. Th(\y can no 
whoro bo Haid to form an agricultural po()i)h\ All tho groat 
tiaclH of land, roaorvod for tlunr nse, thronghont tlui oontinont, 
ictain tluMr native forest character; and it is only at great 
hittM\als, where spots of soil appear ol'ibi'ing peculiar facilities, 
i'oi' cultivation, that tho richoH of tho oa,rth are even ])artially 
brought inl,o ai'-tion. WhiMi Hiich ma.t(M'ia,lH aro neglected, it is 
not to bo .suppoMod tha,t othoihi, r(M[inring greater strength 
of tho accunmlativ(^ principle to form them into instruments, 
will be put to use. None, therefore, even of the most coinmon 
handicrafts, \i'hich they see the wliite man continually exercis- 
ing, are to IVe found among thiMii. Tho axe and tho knife, are 
almost their only tools. 1'hoir houses, thoir fuinitur(\ thoir 



1 



1 NTV.n N ATION A \. DI VVVM KNC'KS 



I'lolliiiii;- ;uul uloiisils n\v all similar, ami of a sort lt> s(MV(M)uly 
[\\o lUM'tls of Ilu> moiiuMit. Notliiiiij; is imIIum' it>siM\(>il or j»ro- 
vitlod for i\ ruluiitv in any ways (iislaiit. TluMr sttu'k of 
iiist luimMits Ihmiiv;- thus coiilimvl to such as mi'(> of tlio most. 
♦ luiiUly rolunuMij; tuiiors, a vast mass of mat(MMals is ii(\i:;l(H't(>(l. 
which hy another ract\ i^onciikmI by »>th(M' principles of action, 
ari> con\»M(C(l, or cou\ tMt iiiLi;. inl" tiic mt>ans it^ ahmulantly 
supplyini;' th(^ m>ct>ssitics ami tMijoymcnls of a nunu>nMis popu- 
lation. 'riu\v thus alVonl a slfikinjj; iiislaiict\ i»r l.lu^ ollW^ts 
rosnllins; t'rom a !.\ii\'it diMicitMicy of slriMi;j;th in the accunuihl- 
livo principlt>. Tlu^y have skill, ailc(iuati> tt> th(> fotniation 
of inslrnnuMits capahlt< i^i ministciitiL!; to the nec»>ssities and 
<'oi\d"ofts ol' a numerous populaliou, lor wilh the jiowers of tiro, 
thi> axt\ ami tlu* hot>. the i;ieat aL;ents m convert inj;' tlu> fon'st. 
to the Held. tlu\v ai'e W(>11 ac(piaint(Ml ; th(\v havt> imlnstry, 
<'onltMit with a very mod(Matt\ it' inuuedial(> lewai'd ; yiM. from 
iuadinpiatt^ stitMii^th in this principle, thcvse all lie inert, and 
useless, in {\\o midst of thi» L;;rt\att>sl ahundance ol" matiuials; 
and, th(> menus for t>\ist(Mict> in llu> timt> to come not luMUij; 
piovid(>d.as what w;is future luH-omes pres»>nt , want and niistMy 
arrive with il.aml th(\st> tribes art> disaj»peaiini;' before tluMu. 
The winlt> man robs their wt>ods and waters oi the stort>s with 
which naturt> had rt>pKM»islu>il them, aiul the arts, by tlu> eoni- 
nnmii-ation of which ht> would eomjuMisatt> l\»r tlu» spoliation, 
aie despiscil. 

Though tlu* civili/.t>d man may ho truly said to have Ihhmi 
{\\c !';icat(vst en»Mny of {\\o Indian, yiM lu> has not. always been 
so wilfully, ;iuil, in many inslam>es, lu< has tMiileavortHl to 
be his biMuMactiM'. Hut, though his endtvivors may oeeasion- 
ally, for a tinu\ h;i\(> arresti^l the progress of the evil, they 
ha\t> uiner ;ilto;',iM htu- rcmovinl it, or been of piuniancMit ad- 
v;inta;j;e. Of all attempts of the kiml. that of the .)t>suils. in 
rarai^uay, S(>ems to havi> been product ivt> of most >;'ood. and lo 
\\:i\v i:;iv(Mi the fairt>st promis(> of ultimatt^ sm'ct»ss. This 
partial suci'ess is evidently to bo Ivacod. to the usual taleid oi 
those fatluMs. in I'hvuly ptM'ceivinsjj (ho aet»ial eiri'umstanc»^s o\' 
l\\o I'ondition, and disposition of tlu» men wilh whom lh(\v had 
to deal, and to their usual ability in conviMlin;j; tlu^se i-ircum- 
.stanci>s into means of accon\plishini; iho ends ihoy had in view. 



IN ACCUMIII.ATIVK S'lRKNGTII 76 

Their ])liui pr'CHcnt/K l-wo j^rc;!,!, r(!!i,t;iii'(!H. Tlx'y wrouj^lil, iiftor) 
l;})0 Tixli.'um iJiroiii^li iliii,!/ which wuh uIoih; in ihotn capJihh; of 
cxcilirif^ IvO (!x(/(!ri(l(;(l ucLioii, Uicii' Jovo oi" t,h(iir HC/Vcral naJ/iouK, 
uiid (JovotioM l,() Uicir ini(5n!HiH. 'I'hcy l/ook every iri(!ii,iiH lo 
nhow l/h(;ui t,h;i,l/ Uioy could, Jitid would, proinol/C (/Ii(;ho inl(!n;HtB; 
nnd UiiiH idciilirying UichihoIvch wiUi ilx; rialioiiul cx'iHUiUoa 
•diul proMpofil-y, tranHfcrrcd l/O l/h(;ir order ii, hir'^o |»<»rl/ior) oi" 
Uio KLroiig i'(!(!liri}^R uriHinj^' i'foin iMinelitK n!(;(;iv()d j'rom, and 
^il)li^a,iioiiH a.iid diil;i(!H owiiifi,' l-o hiw ir-iho, which are the great 
inovcrH, and r'idcfH, oi' the; Ixsiiig of the Iridiar). 

The cfrortK of th(! iniKHioiiaricH kcjcmi firHt to have })een 
directed to eonviiice the cfiief'H, and leaderH, oi tlie Heveral 
tribeH tf) which tfiey penetui.l><5d, oi' the Hincerity of their desire 
to 1)0 of Kcrvice to tlietri. Ah the incHWingerH of a religion, 
proTniwing j>cace on earth, and immortal haj)j)Jn(!HH after d(;ath, 
they ha/I elainiH on their attention wliich are foreign to our 
Hid)je(;t. I')(!HideH thew; ]iow(;ver, aH the ])OKHeHHorH of the artw 
iind powerH of civili/ation, tlxiy liad otherH, which were more 
palpable to the eompreheiiHion of the Havage. EuropeanH were 
known by thiH unfortunate race, a,H ])OHHeHHorH of powerH ho 
gi(!at, aH to a])pear Hupernatural ; but they had hitherto been 
known oidy an en(;niieH and oppreHSors, the Ijearers of unnpeak- 
able cahuriiti(!K or utter ruin. Once th(!n tluiy w(}re convinced, 
that the white men who now came to them, were really 
friendn, and were denirouH of exerting those powerH for their 
])reHervation and liappiniiHH, wliich had hitherto been (jmployed 
for their dcHtruction, tln^y were ready to welcome them as 
their bcHt benefactorn, and moHt powerfid protectorn. The 
uHual int(!lligeiice, prudence, and fortitude of the fatfiern did 
not denert them on thJH occawion, and, though not without the 
expense of the martyrdom of several of the order, they huc- 
€(!ed(;d in impnjKHing the IndianH witli the belief, that they 
were really their friendH. The rest of th(} tank wan compara- 
tively eany. Convinced on this head, the navagen willingly, 
and imirKMliately, became docile dincipleH. Fully Hatinfied of 
the advantagcH wliich l^^uropean arts give to a people, they set 
themHfilvcH with />(jal to acquire and practise them, for the 
benefit of their several triben. Though not for his individual 
advantage, or that of his family, would th(; Indian nacrifice 



76 INTERNATIONAL DIFFERENCES 

present pleasure or embrace present toil ; for the good of his 
nation he had been taught, and was ready, to bear or forbear 
any thing. The Jesuits had, therefore, only to teach what it 
was necessary to do, or endure. The details they have left us 
of their progress, are generally interesting, sometimes amusing, 
not unfrequently, to those unacquainted with the peculiarities 
of the Indian character, almost incredible. 

They themselves, in the first instance, taught their proselytes 
how agricultural operations were to be performed, by taking 
the spade, and other instruments, in their own hands. But, 
when thus, by precept and example, they had brought them to 
be able to execute the several operations of ploughing, sowing, 
reaping, etc., the difficulty was but half over. Without the 
constant superintendency and vigilance of their instructors, 
they never would have practised them. Thus, at first, if these 
gave up to them the care of the oxen with which they 
ploughed, their indolent thoughtlessness would probably leave 
them at evening still yoked to the implement. Worse than 
this, instances occurred where they cut them up for supper, 
thinking, when reprehended, that they sufficiently excused 
themselves by saying, they were hungiy. 

By the indefatigable perseverance, and dexterous manage- 
ment of the missionaries, they were, however, at last, brought 
so to labor the earth, as, in that fertile soil and warm climate, 
to produce abundant returns. They were also at peace with 
one another, and feared by their enemies. The tranquillity, 
the security, and the plenty, they thus enjoyed, gave the 
Jesuits additional claims on their confidence and gratitude, 
which the good fathers seem to have taken care should be 
made sufficiently apparent to them. Hence it was, as Charle- 
voix tells us, that they thought they could never sufficiently 
testify their affection and gratitude for those, who had rescued 
them from barbarism and idolatiy, and who, in spite of the 
most severe persecution, and the greatest toil, had procured 
them all the advantages they enjoyed. They continually 
recalled to mind the miserable state from which they had been 
brought : the parents instructed their children, and they saw 
with their own eyes, the condition of the neighboring nations, 
who had not participated in their happiness. It was by no 



IN ACCUMULATIVE STRENGTH 77 

means wonderful, as he continues, that these things produced 
an attachment for the missionaries, that was without bounds. 

The additional authority and influence thus acquired, they 
employed in enforcing stricter obedience, and increased in- 
dustry, and gradually leading on their disciples to the practice 
of the finer and more difficult arts. In this they perfectly 
succeeded, so that there were every where to be seen, says the 
same author, workshops of gilders, painters, sculptors, gold- 
smiths, watchmakers, carpenters, joiners, dyers, etc. In the 
exercise of these useful and ornamental arts, we must not 
suppose the artists were animated by the motives that excite 
similar labors elsewhere. They seem scarcely to have had an 
idea of personal property, or individual gain, but to have been 
as mere children, looking up to the Jesuits for every thing, 
and ready to do every thing for them, or submit to any thing 
from them. 

"These fathers," says Ulloa, "have to visit the houses, to 
examine what is really wanted ; for, without this care, the 
Indians would never look after any thing. They must be 
present too, when animals are slaughtered, not only that the 
meat may be equally divided, but that nothing may be lost." 
" It has been necessary," says Charlevoix, " to appoint superin- 
tendents, who inspect every thing accurately, and see if they 
are busy, if their cattle are in good condition, etc. The labors 
of the women are regulated, as well as those of the men. At 
the beginning of the week, there is distributed among them, a 
certain quantity of wool, and cotton, which they are obliged to 
return, on Saturday evening, ready for the loom. But, not- 
withstanding all this care and superintendence, and all the 
precautions which are taken to prevent any want of the 
necessaries of life, the missionaries are sometimes much em- 
barrassed. This proceeds from three defects, of which the 
Indians have not yet been corrected, their improvidence, 
indolence,^ and want of economy ; so that, it often happens, 

^ Indolence and improvidence are, in our system, reduced to one defect. 
Indolence is, the not laying out present labor to secure future abundance. 
Improvidence, the squandering present abundance, in disregard of future 
coming want. They both proceed from the predominance of the present over 
the future, the low strength of the effective desire of accumulation. 



78 INTERNATIONAL DIFFERENCES 

that they do not reserve themselves a sufficiency of grain, even 
for seed. As for their other provisions, were they not well 
looked after, they would soon be without wherewithal to 
support life." 

Tlie mode of operation, which the Jesuits adopted, had un- 
doubtedly the advantage of bringing out all the energies of 
the Indian. He was thus induced willingly, and therefore 
zealously and successfully, to apply his powers to the acquisi- 
tion and practice of European arts, and, while the missionaries 
maintained their power, and formed a part of the polity which 
their sagacity and perseverance had established, it gave every 
token of prosperity and vigor. Their prudence and providence 
led into efficient action the desire, which every individual felt 
for the future prosperity of his tribe. The powers of the 
social and benevolent affections of the mass had free course, 
and what was wanting in intellectual energy being supplied by 
the fathers, the desire of accumulation of the whole body 
became sufficiently effective and strong, to form a larger stock 
of instruments. What, therefore, might, at first sight, strike 
us as the most difficult part of the project, the establishing a 
community of goods and interests, was, in reality, that which 
rendered it of easy execution. AVith all the advantages 
attending such a form of society, — the freedom from strife, 
jealousy, contention, and care, enjoyed by the great majority, — 
it had also the disadvantage of requiring, and therefore exciting, 
in the multitude, little or no exertion of the intellectual facul- 
ties. The converts had become, or were becoming, mere 
machines in the hands of the missionaries. The whole stock 
of instruments formed by the common labor, was in the 
possession of the fathers, and the share which the Indians 
received of the returns, depended on their pleasure. They 
were in fact regarded as beings of a superior order, whose 
actions were of necessity right, and whose slightest wishes 
were laws. 

If we judge from what is known of the state of the 
American continent at its discovery, it would seem that 
this form of society, is that which the hunter, changing 
directly to the agriculturist, naturally assumes. His devotion 
to the interests of the tribe, passes there into affi^ction for the 



IN ACCUMULATIVE STRENGTH 79 

person, and blind obedience to the will of the chief. The 
accounts we have of the condition of the kingdoms that the 
Spaniards found established in the most fertile regions of 
the continent, describe the power which the rulers pos- 
sessed, and the reverence paid them, as excessive. The 
people seem to have, in general, approached the condition 
of slaves, and to have had a large share of the defects of 
that condition, a want of intelligence and energy. 

Our own barbarian ancestors, such as they are described by 
Tacitus, have been often likened to the savage aborigines of 
North America. But, though there may be some points of 
resemblance, the parallel will be found to fail, in several 
important particulars, which, as they seem to have operated 
through the influence they have exerted on that principle, the 
effects of which we are at present considering, may be allowed 
to claim our attention for a little. 

The race, whose occupation of the forests and wildernesses 
to the northward of the Koman Empire, made these, in 
the days of Eome's strength, to be regarded as the regions of 
mystery and wonder, in those of its weakness, of well-founded 
and increasing anxiety and dread, were properly shepherd 
warriors. Though the excitement of the chase frequently 
gave fit employment to their ardent spirits, and its toils to 
their hardy frames, and though its products ministered to 
many of their wants, their cattle were yet their main support, 
and to provide for the sustenance of these, their great busi- 
ness. But the possession of flocks and herds, implies a 
considerable degree of care and foresight, both in protecting 
and making provision for them, and in avoiding to consume 
too great a number of them. It also implies the existence of 
private property to a large amount, and, consequently, of 
strength in the ties binding families together. The parent, if 
he desires to see his offspring enjoy plenty, must exert himself 
to procure it for them. The performance of this duty gives 
him claims on their gratitude, and draws closer the connexion 
between them. The sort of life they lead too, demands less of 
severe exertion, and affords longer intervals of ease. It brings 
them together in larger bands and societies, of which each 
member has rights to defend and interests to provide for, and 



80 INTERNATIONAL DIFFERENCES 

thus produces the rudiments of law, justice, and the poHcy of 
civilized society. 

War may be said to be natural to them, as well as to 
hunters, but it is always open ; concealment is out of the 
question ; their greater numbers, and the necessity of having 
always with them a large train of domestic animals, render it 
impracticable. They have not therefore to fear being sur- 
prised and overcome, before they can have time to defend 
themselves. Hence, the members of a numerous and warlike 
pastoral nation, live in comparative security. They see that 
chance has less intiuence, prudence and resolution more. They 
perceive that they are not altogether the sport of destiny, but 
that their fate depends, in a great measure, on themselves. 
Their minds are less shaken, and their judgments less clouded, 
by superstitious fears and imaginings. The greater security 
they enjoy renders them also less relentlessly cruel. Utterly 
to exterminate their enemies is not necessary ; to break, and 
drive tlieni off, is suthcient. When, therefore, the fury of the 
fight is over, mercy has, with them, a place. 

All these circumstances pertaining to the condition of 
pastoral nations tend strongly to excite the social and benevo- 
lent affections, and the powers of reason and reflection, and to 
give scope to their action among them. The pastoral ancestors 
of the present European race were tierce, cruel, and vindictive 
barbarians ; yet, spite of these forbidding features of their 
character, we can as distinctly trace to them the sources of all 
the more generous and softer virtues, that give happiness to 
their descendants, as we can the free and independent spirit 
that bestows on them liberty and security. Such nations 
have, therefore, naturally a much higher effective desire of 
accumulation than nations of mere hunters. The strength of 
this principle, in fact, seems with them in general, so great, as 
to incline them to form instruments requiring a much superior 
degree of providence and self-denial, to that indicated by the 
breeding of cattle. They are prevented from doing so, by 
their wandering life, and by tlie wars in which they are neces- 
sarily constantly engaged. When, for instance, they are settled 
in a country suited to agriculture, and to which the knowledge 
of the art has penetrated, they have a tendency to become 



IN ACCUMULATIVE STRENGTH 81 

.agriculturists ; that is, to change the land, from which they 
draw their subsistence, from an instrument yielding a large 
return, in proportion to the labor bestowed on it, to one yield- 
ing a still larger return, though requiring proportionally more 
labor and time, and being, therefore, of a more slowly return- 
ing order. 

But such a change, though increasing the whole population 
of the state, leaves fewer in it who can be spared from labor, 
and, consequently, fewer soldiers. In pastoral nations, almost 
all the men are warriors ; in agricultural, only a few can 
be withdrawn from the labors of the field. The latter are 
therefore, naturally inferior to the former in military prowess, 
and are consequently subject to be conquered and destroyed by 
them. Such seems to have been the fate impending over 
Gaul, from the side of Germany, when the appearance of 
Cfesar gave another turn to affairs. The Gauls, we learn from 
him, though then inferior, had once been superior, in military 
renown, to the Germans. It appears likely, that the revolu- 
tion had been occasioned, by their becoming an agricultural 
people, which they, in a great measure, were, in his time. The 
Germans, again, preserved themselves from the fatal effects of 
such a change, by the singular national custom, or constitution, 
that obliged them all, every year, to exchange the lands they 
respectively occupied. By this constant transfer of instru- 
ments, and of the materials of which they might be formed, 
they took away every inducement to work them up into 
orders of slow return, and confined the members of the 
community to the pastoral condition, which experience had 
doubtless instructed them, was most favorable to military 
prowess. 

In the times of the Casars, Europe was thus divided, by an 
irregular line running east and west, into two great parts, the 
one occupied by the barbarians, the other by the Empire. To 
the northward of this line, were many rude nations, strong in 
the mental and corporeal energies of the individuals composing 
them, and in the willingness of each to devote his abilities to 
objects conducive to the good of all, but whose strength was 
largely expended in furious intestine wars. These contests, 
destructive as they were, did not, however, occasion any 

F 



82 INTERNATIONAL DIFFERENCES 

progressive diminution of the vigor of the whole body ; it was 
only the surplus powers of the parts that thus ran to waste. 
The strength of the people of the empire was, on the contrary, 
derived from their union in one great body, and the power 
thence resulting of the energies of the whole being directed to 
any particular point. But this union, as it had been produced 
by compulsion, augured weakness in the several parts, and was 
the cause of weakness. "What each contributed to the common 
ffood was not of will, but from necessitv, and, in the strife thus 
arising, every man learned to consider his own good as separate 
from that of all others. Hence a continually increasing separa- 
tion of interests, and consequent continual decrease of power 
and general decline. The gradually increasing weakness of the 
empire, while the strength of the nations to the northward, if 
not augmenting, renuuned at least unimpaired, rendered the 
arrival of a period when the former should be overpowered l)y 
the latter inevitable. These barbarians believed, that the 
riches of the earth belonged, of right, to the l^est ; according 
to their creed, the bravest. Their most powerful and warlike 
tribes, therefore, possessing themselves of the more fertile 
regions, those bordering on the line diWding them from the 
empire, pressed ^■iolently against it, and, opposed by a force 
continually diminishing, at length burst through it. 

Three great events, each leading on the other, would seem 
to have been the necessary consequence of this revolution. Of 
these, the tirst was the occupation of the whole continent by 
the barbarians, and the driving back the still onward-urging 
host of their brethren ; the adoption by them of the arts which 
had previously flourished in the empire, and their becoming an 
agricultural people, was the second ; and their running the 
chance of being in turn overpowered by the northern warriors, 
the third. Until the arrival of the first period, when, the 
continent having been completely overrun and ravaged by the 
barbarian multitude, had assumed a form closely approximating 
to that of the territories they had formerly occupied, there 
could be no approach to rest, but the tide must still advance. 
Wlien the receptacle vacant for its reception was once com- 
pletely filled, the mighty mass had to recoil on itself. The 
battle of Chalons fixes this period. Europe, with the exception 



J 



IN ACCUMULATIVE STRENGTH 83 

of the corner occupied ?jy the Eastern Empire, and which 
belonged rather to Asia than to it, seems then to have been 
reduced nearly to the state of one immense cattle-pasture. 
But the impetus that had been given still continued, and new 
hosts crowded on to share that, of which the last fragments 
had been divided. The reflux then of necessity took place. 
The hosts of the west and the south, under Theodoric and 
Elius, met those of the east and the north, under Attilla, on 
the plains of Champaigne. The vastness of the masses and the 
violence of the shock are shown by the destruction produced ; 
the accounts of the period rating the slaughter variously at 
from one hundred and sixty-two thousand to three hundred 
thousand. 

From this period the great body neither much advancing 
nor receding, was agitated chiefly by fierce internal commotions. 
The time when their violence terminated marks the second 
period, when the general prevalence of agriculture, lessening 
the number of warriors, diminished the extent and frequency 
of wars. The knowledge of the elements of it, and of the 
other arts, diffused throughout the various multitude that now 
peopled the continent, could not forever lie dormant. It has 
been already observed, that the strength of their effective 
desire of accumulation, had been such as to produce a tendency 
among them to give greater capacity even to the materials of 
which they had the command in the northern regions, though 
at the expense of changing them into instruments of somewhat 
slower return, by converting their lands from pasture to tillage. 
This tendency became inevitably stronger, as they advanced 
into more fertile soils and milder climates. The revolution 
itself took place gradually. The exact date of the pre- 
ponderance of the one condition over the other, cannot, 
perhaps, be determined but by the effects produced by its 
arrival. It is only in the state of hunters, or shepherds, that 
nation can literally go to war with nation. In the agricultural 
state, it is not the men of the nation, but a small part of them, 
the soldiery, that fight. Taking this as the criterion, we might 
fix the reign of Charlemagne as that, in which war, as the 
business of European nations, properly ceased. The conclusion 
of that monarch's reign, has sometimes been reckoned the 



84 INTERNATIONAL DIFFERENCES 

commencement of a period of weakness in the several states, 
and of want of ability in their monarchs. The historian, it is 
true, for centuries afterwards, finds no events that he esteems 
great to record. His art can call up no pictures of heroes 
leading armies to the field, conquering, or being conquered, 
overthrowing, or establishing kingdoms. Nevertheless, if the 
view we are taking is correct, it is from this era that we must 
date the commencement of strength, not of weakness. The 
people of Europe then began to rise in the scale of industry. 
They commenced a new era, to which no one can assign a 
positive termination, because it became their occupation to 
conquer nature, and not man, and, to the fruits of the one 
conquest, we can set no limit, whereas the utmost advantages 
of the other are very speedily exhausted. 

It may here be observed, that the difference of the strength 
of the principle of accumulation in nations of hunters, and in 
pastoral nations, seems to mark out a very opposite destiny to 
a great country overrun by the one, to that which would await 
it from being subdued by the other. The naturally low degree 
of strength of the accumulative principle among nations of 
hunters, prevents them, as we have seen, from forming instru- 
ments of sufficiently slow return to embrace the materials to 
which the arts of civilized life might give capacity. While in 
their possession, therefore, they lie unemployed, and useless. 
The progress of civilization and art over the continent of 
North America, is now every day, bringing io light traces of 
their former presence, and evidence, consequently, of the exist- 
ence there at some remote period, of a people far superior in 
these respects to the tribes that occupied all but the southern 
parts, when discovered by Europeans. The question has been 
asked, how did it happen that they, and the knowledge and 
power they possessed, utterly perished. In other instances, 
civilization has either protected its possessors, or, if they were 
overcome, has reacted on their conquerors, and spreading among 
them, has, so to say, subjugated and governed them in turn. 
The history of our barbarian ancestors has been quoted, as a 
circumstantial account of this seemingly natural progress. 
But, if the principles, the operation of which forms our present 
subject, be correct, they furnish a sufficient cause for the 



IN ACCUMULATIVE STRENGTH 85 

diversity of effects flowing from the two events, and show, 
that, instead of there being any reason for surprise at the 
hunter of the woods disdaining the labors and rewards of 
civilization, it is rather our business to inquire how he could 
ever have been led to adopt them. Had the nations whom 
the north poured forth on the south of Europe, been hunters, 
and, had no extraneous cause intervened, it is not improbable, 
that that continent would, even at the present day, have been 
one wide forest from side to side. 

The third of the great events referred to, the evils and 
dangers arising to the ancestors of the present inhabitants of 
Europe, from their former brethren of the north and east, 
when the strength of their accumulative principle led them to 
put off the barbarian, and employ themselves in giving to the 
materials within their reach the capabilities for the supply of 
the wants of futurity which art showed that they possessed, 
were felt for many centuries. The change they were then 
undergoing, though it added very greatly to the total numbers 
of the several nations, lessened the numbers of the warriors. 
The instruments they formed being of the more slowly return- 
ing orders, though the whole income from them was much 
greater, the labor necessary to produce it was more than 
proportionally greater, and the portion of the population left 
free for the purposes of warfare was consequently less. It 
were foreign to our purpose farther to allude to this cause of 
commotion and revolution, than to observe, that the mischiefs 
and dangers arising from it, seem to have been moderated by 
the very gradual manner in which the change took place, and 
to have been counteracted, and finally overcome by the 
additional power acquired through the progress of invention in 
the arts of civilized life. 

The next example I shall adduce, of the influence of the 
accumulation principle, will be that of the Chinese Empire. 
All accounts agree in ascribing to the people of this Empire, a 
peculiarity running through the whole structure of their social 
and domestic life, by which alone perhaps its mechanism can 
be well explained, and which seems to form its great governing 
and sustaining principle. Their moralists and legislators 
appear to have successfully endeavored to give to the feelings. 



86 INTERNATIONAL DIFFERENCES 

naturally springing from the parental and family relations, an 
influence and authority, far superior to what these possess 
among other nations, — the power and unity of a regular 
system of duties and obligations. A father, as the immediate 
though secondary cause of existence, is regarded with nmch of 
the feelings that are elsewhere reserved for the infinite and 
eternal fountain of all existence, power, and perfection, and, 
consequently, claims, as a sacred right, a measure of love, 
reverence, and obedience, that to us seems perfectly unnatural. 
Both while alive, and after his death, he is reverenced, we 
might say adored. His descendants form a little distinct 
society bound together by the strongest ties, a system apart 
from all others, having a common centre of action of its own. 
What is conceived to be a reality in families, is metaphorically 
applied to the whole empire, and its several parts. The 
emperor is the father of his people, his affection for them as 
his children is held to be the animating principle of his actions, 
implicit obedience to him as their parent, who can only com- 
mand what is good, is the first duty of his subjects. Each 
inferior magistrate is also regarded as the father of those over 
whom he rules. 

The result has been so far happy, that the harshness of 
despotism is somewhat tempered by the mildness of the pater- 
nal character. We are so constituted, that no part can be 
assumed, and habitually acted, without in some degree mould- 
ing om^ nature to its form, and making that a reality, which 
may at first have been only a fiction. It has also been happy 
in the strength it has given to the connexions and afiections of 
those belonging to the same family, or springing from the same 
stock. A man must be strongly excited to good, and deterred 
from evil, by being aware that his actions and fortunes are the 
objects of solicitude to every member of the little community to 
whom he is bound by the ties of blood and kindredship ; that 
they rejoice at whatever he accomplishes that is honorable and 
happy ; and are afflicted and disgraced by his imprudencies 
and errors. 

But, viewing the system on another side we may perceive 
that evil has sprung out of it. The blending of the characters 
of parent and lord, and thus making of each head of a family 



IN ACCUMULATIVE STRENGTH 87 

an absolute master, the judge of right and wrong, places man 
in a situation dangerous to his weakness. It may encourage, 
at all events it enables him to gratify without fear, whatever 
vice or immorality is not necessarily open or declared, but may 
have a veil, however thin, of outward decorum thrown over it. 
Besides this, the absolute submission and unreflecting obedience 
which it inculcates, are much opposed to the expansion of the 
intellectual and moral powers. When all impulses are from 
without, it is impossible that the mental eye should turn 
steadily on the divinity within, or promptly and resolutely 
execute what it dictates. 

We perceive a great attempt to organize a society, animated 
by the principles of love and affection, regulated by those of 
virtue. The form indeed exists, but under it there is little 
substance. Hence is generated a mass of apparent contradic- 
tions : viewed in one light, we see a great family, wisely and 
beneficently governed ; in the other, a servile herd, crouching 
beneath the sharp lash of selfish despotism. On the one hand 
is presented to us a people, among whom doctrines of a very 
pure morality, of universal benevolence, of devotion to the 
public good, are inculcated both by reward and precept ; 
among whom learning is held in such esteem as to be the sure, 
and, in theory at least, almost the only road to honour and 
authority ; among whom the freedom of the press may be said 
to have been established a thousand years ;^ among whom out- 
ward decency and decorum prevail, and security and order are 
strictly maintained, not by military authority, but by their 
own good sense quietly submitting to the rule of the civil 
magistrate. On the other hand we see this same people, in 
private, abandoned to gross sensuality, to drunkenness and de- 
grading licentiousness ; in public, in affairs of trade and traffic, 
in the business and diplomacy of the state, making their 
individual advantage their sole practical rule of right and 
wrong. 

^ Where the press is merely a brush, and the types are blocks of wood, 
which a common workman carves out for a few pence, it must of necessity be 
essentially free. The best proof of this is, that books for which there is a de- 
mand, licentious publications for instance, are extensively circulated, notwith- 
standing all the efforts of the magistrate. 



88 INl^ERNATIONAL DIFFERENCES 

Such being the character of this singular people, our prin- 
ciples would give to them a less strength of the eftective desire 
of accumulation than the generality of European nations, but a 
greater than that of other Asiatics. This desire is lessened bv 
a propensity to sensual gratitications and seltish feelings, anil 
by a state of society where there is any thing to endanger tiie 
security of future possession. All these produce a tendency 
to seek the enjoyments of to-day, at the risk of leaving the 
wants of to-morrow unprovided for. As compared with other 
than European nations, however, we might expect them to 
possess no inconsiderable portion of the virtues of prudence 
and of self-control. The general diftusion of a tincture of 
learning, and perception of something of the beauty and 
obligations of moral rectitude, the consequent subjection at all 
events of the more ^'iolent passions, and the great desire to 
provide for the wants of their families, which the strength of 
the connexion thus subsisting between parent and child en- 
genders, raise them, in these respects, much above Asiatics in 
general. We should, therefore, a priori, suppose, that the 
instruments formed by them must be of orders of quickei 
return, and embracing a less compass of materials, than those 
constructed by European nations ; but of slower return, and 
embracing a greater compass of materials, than those to which 
the strength of the accumulative principle carries the othei 
nations of Asia. All who have written concerning this great 
empire agree in the statement, that the necessary cost of sub- 
sistence is there small, and the wages of labor low. To these 
two circumstances, determining their state, is to be added a 
third. The in\'entive faculty would appear to have been once 
very active among them ; their knowledge of the arts suited to 
their country is very extended. 

Durability is one of the chief qualities, marking a high 
degree of the eftective strength of accumulation. The testi- 
mony of travellers ascribes to the instruments formed by the 
Chinese, a durability very inferior to similar instruments, con- 
structed by Europeans. The walls of houses, we are told, unless 
of the higher ranks, are in general of unburnt bricks of clay, 
or of hurdles plastered with earth : the roofs, of reeds fastened 
to laths. We can scarcely conceive more unsubstantial, or 



IN ACCUMULATIVE STRENGTH 89 

temporary faljiics.-^ Their partitions are of paper, requiring 
to be renewed every year, 

A similar observation may he made, concerning their imple- 
ments of husbandry, and other utensils. They are almost 
entirely of wood, the metals entering but very sparingly into 
their construction ; consequently they soon wear out, and 
require frequent renewals. A greater degree of strength in 
the effective desire of accumulation, would cause them to be 
constructed of materials requiring a greater present expendi- 
ture, but Ijeing far more durable. From the same cause, much 
land, that in other countries would be cultivated, lies waste. 
All travellers take notice of large tracts of land, chiefly 
swamps, which continue in a state of nature. To bring a 
swamp into tillage is generally a process, to complete which, 
requires several years. It must be previously drained, the 
surface long exposed to the sun, and many operations per- 
formed, before it can ])Q made capable of bearing a crop. 
Though yielding, proljaljly a very considerable return for the 
labor bestowed on it, that return is not made until a long time 
has elapsed. The cultivation of such land implies a greater 
strength of the effective desire of accumulation than exists in 
the empire.^ 

The produce of the harvest is, as we have remarked, always 
an instrument of some order or another, it is a provision for 
future want, and regulated by the same laws as those to which 
other means of attaining a similar end conform. It is there 
chiefly rice, of which there are two harvests, the one in June, 
the other in October. The period then of eight months, 
between October and June, is that, for which provision is made 
each year, and the different estimate they make of to-day and 
this day eight months, will appear in the self-denial they 
practise now, in order to guard against want then. The 
amount of this self-denial, would seem to be small. The father 
Parennin, indeed, asserts, that it is their great deficiency in 
forethought and frugality in this respect, which is the cause of 

^ La Harp, Vol. VIII. p. 289. Lettres edifiantes, Vol. X. p. 107. 

2 Staunton, China, Vol. II. p. 244. Ellis, Embassy to China, pp. 268 and 
316. The best proof perhaps is in the premiums offered for their cultivation. 
See Lettres edifiantes, Vol. XI. p. 525. 



90 INTERNATIONAL DIFFERENCES 

the scarcities and famines that frequently occur. " I believe," 
he says, " that, notwithstanding its great number of inhabitants, 
China would furnish enough of grain for all, but that there is 
not sufficient economy observed in its consumption, and that 
they employ an astonishing quantity of it in the manufacture of 
the wine of the country, and of raque." As confirmative of 
his observations, he remarks the number of fires occasioned by 
the haljit of drinking to excess before going to bed, and the 
prevalence, among the lower orders, of a malady called ye-che, 
produced by the same vice.^ 

A document given in the Jesuit's Letters, a translation from 
the Gazette of the empire in 1725, probably shows nearly 
what order instruments of this sort, and therefore of all sorts, 
really belong to : that is, the difference between a quantity of 
rice, or of any thing else, in possession at the end of harvest, 
and a (piantity to be had in spring. It proceeds on the sup- 
position that three bushels at the former period are equivalent, 
and, in ordinary years, when there is neither famine nor 
scarcity, will produce four at the latter. By purchasing at the 
former period, and selling at the latter, the writer therefore 
estimates, that thirty bushels will, at the end of five years, 
produce more than one hundred. The estimate is perhaps a 
little high, but from the nature of it, of the individual from 
whom it comes, and those to whom it is addressed, it is 
unreasonable to suppose that it is much too high. Taken in 
conjunction with a description of a scheme for raising funds, of 
which an account is subjoined,^ it indicates that instruments in 
China are about the order D, 

The deficiency of the strength of the effective desire of 
accumulation, is balanced by the smallness of the necessary 
cost of subsistence, and wages of labor, and by the great pro- 

^ Leltrea edifiantes, Tom. XII. p. 199. The father Parennin seems to have 
beeu one of the most intelligent of the Jesuits, and hail the very best oppor- 
tunities for observation, having spent a long life among the Chinese of all 
classes. His testimony is much more to be depended on, concerning such a 
fact, than that of passing travellers, whose cursory observations extend only 
to what may be seen on the exterior of the habitations. 

'^[Here Rae refers to a long "note" appended to the original work, which 
is reproduced as " Note F " in the Appendix to this volume.] 



IN ACCUMULATIVE STRENGTH 91 

gress which has been made in the knowledge of the arts suited 
to the nature of the country and the wants of its inhabitants. 
Where the returns are quick, where the instruments formed 
require but little time to bring the events for which they are 
formed to an issue, even the defective principle of accumulation 
of the Chinese is able to grasp a very large compass of 
materials. 

The warmth of the climate, the natural fertility of the 
country, the knowledge which the inhabitants have acquired 
of the arts of agriculture, and the discovery and gradual adap- 
tation to every soil of a variety of the most useful vegetable 
productions, enable them very speedily to draw from almost 
any part of the surface, what is there esteemed an equivalent 
to much more than the labor bestowed in tilling and cropping 
it. They have commonly double, sometimes, treble harvests. 
These, when they consist of a grain so productive as rice, the 
usual crop, can scarce fail to yield to their skill, from almost 
any portion of soil that can be at once brought into 
culture, very ample returns. Accordingly there is no spot 
that labor can immediately bring under cultivation, that is 
not made to yield to it. Hills, even mountains, are ascended 
and formed into terraces ; and water, in that country the great 
productive agent, is led to every part by drains, or carried up 
to it by the ingenious and simple hydraulic machines, which 
have been in use from time immemorial among this singular 
people. They effect this the more easily from the soil, even 
in these situations, being very deep and covered with much 
vegetable mould. But what yet more than this marks the 
readiness with which labor is found to form the most difficult 
materials into instruments, where these instruments soon bring 
to an issue the events for which they are formed, is the 
frequent occurrence on many of their lakes and waters of 
structures resembling the floating gardens of the Peruvians, 
rafts covered with vegetable soil and cultivated. Labor in 
this way draws from the materials on which it acts very 
speedy returns. Nothing can exceed the luxuriance of vegeta- 
tion, when the quickening powers of a genial sun are minis- 
tered to by a rich soil, and abundant moisture. It is otherwise, 
as we have seen, in cases where the return, though copious, is 



92 INTERNATIONAL DIFFERENCES 

distant. European travellers are surprised at meeting these 
little floating farms, by the side of swamps which only require 
draining to render them tillable. It seems to them strange 
that labor should not rather be bestowed on the solid earth, 
where its fruits might endure, than on structures that must 
decay and perish in a few years. The people they are among 
think not so much of future years as of the present time. The 
efifective desire of accumulation is of very different strength in 
the one, from what it is in the other. The views of the Euro- 
pean extend to a distant futurity, and he is surprised at the 
Chinese, condemned, through improvidence and want of sufti- 
cient prospective care, to incessant toil, and, as he thinks, 
insufferable wretchedness. The views of the Chinese are con- 
fined to narrower bounds, he is content, as we say, to li^^' 
from day to day, and has learnt to conceive even a life of toil 
a blessing. The power which the singular skill and dexterity 
of this people, notwithstanding their deficiency in the strength 
of that principle that forms the subject of this chapter, givi's 
them, to work up into instruments supplying a larger circle ol 
wants, many materials that would otherwise lie dormant, 
is seen in various instances besides those referred to. It may 
be sufficient to mention the manufacture of silk, and the culti- 
vation and manufacture of tea. They are both instances of 
the power of the inventive faculty to form instruments, soon 
bringing to an issue events, that repay, according to the rate 
at which labor is there repaid, considerably more than the 
cost of their formation. 

However we explain it, it will I think be admitted as a 
fact, that Europeans in general far exceed Asiatics, both in 
vigor of intellect and in strength of moral feeling. The 
average duration of human life is also with them more 
extended, and property more secure. These circumstance- 
give much superior power to the accumulative principle in the 
one continent, to what it has in the other, and occasion the 
instruments constructed in each to be of very different order- 
and to form a strong contrast when compared together. The 
attention of an European, when he visits Asia, is arrested 
by the slightness and want of strength, solidity, finish, and 
consequently durability, of every instrument he sees. Were an 



IN ACCUMULATIVE STRENGTH 93 

Asiatic city deserted, the place where it stands would, in half a 
century be scarcely discernible. The instruments constructed 
being of the more quickly returning orders, all materials which 
require much labor, and bring in only distant returns, are 
neglected. Mud takes the place of stone, wood of iron. In 
Europe, on the other hand, in proportion as the minds of the 
people are reflective and intelligent, and their habits moral, we 
find that the interests of futurity operate on them so largely 
as to occasion a great capacity to be given to materials, on 
which, in Asia, a very small capacity would be bestowed, 
or which would there be altogether neglected. The most 
stubborn morasses are drained, and converted into arable 
lands ; roads, canals, bridges, fences, dwelling-houses, furni- 
ture, tools, utensils, in short all instruments whatever, indicate 
that the formers of them have regard to a distant futurity, and 
are willing to give up for its interests a large portion of the 
means of present enjoyment. 

It is to be observed, however, that in Europe invention has 
in general made much greater progress than in Asia. Perhaps 
in their knowledge of agriculture and horticulture the Chinese 
equal most European nations, but in other arts they are 
far inferior, and, with the exception of them, no Asiatics, 
in the knowledge of these or of other arts, can compete 
with Europeans. On the other hand, the wages of labor 
in Europe, are far higher than in Asia. This circumstance, 
countervailing the other, would probably, in many cases, 
Ijring the durability and efficiency of the instruments con- 
structed in both continents nearly to an equality, were it not 
for the existing difference in the strength of the accumulative 
principle. 

The examples we have hitherto considered have been of 
societies, where the principle of accumulation has been either 
advancing, or, at least, not sensibly retrograding. It may 
be well to turn our attention to the effects produced by 
a sensible decrease in its strength. The history of the 
declining ages of the Eoman empire furnishes us with such 
an one. 

Eome may be said to have carried with her, from her 
earliest germs, the elements of decay. Her power was entirely 



94 INTERNATIONAL DIFFERENCES 

that of force, a principle suppressing and subduing every 
thing, generating nothing ; like flame spreading far and wide, 
investing whatever it catches with momentary splendor, but, 
like it, destroying that which feeds it, and going out at length 
leaving desolation behind it. The proper trade of the Romans 
was war. But when in agricultural countries war becomes the 
occupation of a community, and conquest the means by which 
it seeks to acquire wealth and greatness, evils arise which time, 
instead of mitigating, increases. When hunters go to war with 
hunters, or herdsmen with herdsmen, the object in view, 
besides overcoming their enemies, is to obtain possession of 
a portion of the surface of the earth, and the animals wild, or 
tame, nourished by it. Over such communities therefore, 
though war, passing like a destroying tempest, leaves ruin 
behind, yet time obliterates all traces of the devastation pro- 
duced by it, and the same territory sees a new generation arise 
from the victors or vanquished, as free, happy, and prosperous, 
as their forefathers. But in states of society where the riches 
of the earth are not In-ought out hj the wild or tame animals 
which its surface nourishes, but by the husbandman who tills 
it, there conquest can never be a permanent gain, unless 
through some permanent right acquired by it over the inhabi- 
tants of the territory subdued. Hence the fact of war being 
successfully pursued as a gainful trade by any community, 
seems to imply, that the conquered submit to slavery, either 
personal or political, probably partly to both. Gain was always 
the iiltimate object aimed at by the Romans. It was not to 
chastise an insult, or to protect their citizens in the undis- 
turbed prosecution of industry, that they fought or conquered. 
These might occasionally serve for pretexts, and were some- 
times perhaps the exciting causes of war, but for the real 
fruits of victory they always looked to the spoliation of 
the vanquished, and triljute, in one shape or other, imposed 
on them. Every people with whom they came in contact 
was regarded by them first as an enemy to be subdued, after- 
w^ards as a province from which they were to be enriched. 
They were in truth a band of well disciplined robbers, whose 
virtue, law, religion, centered in their swords ; courageous 
indeed, and keeping to their positive engagements with a 



IN ACCUMULATIVE STRENGTH 95 

fidelity common to brave men (and which, as it is for their 
interest, even scattered banditti observe), but whose course 
of rapine was still onward, relentless, merciless, unchecked 
by thoughts of the corporeal pains, or mental debasement 
it produced. 

Such an empire could only have been formed by overpower- 
ing the finer and more generous and elevating feelings, and 
could not be maintained without having the effect of giving the 
preponderance to the debasing, selfish, and therefore destructive 
principles of our nature. It left but one great virtue, that of 
patriotism, with the Eomans a sort of enlarged esprit de corps, 
and one great moral quality, that of courage, or the meeting 
danger undauntedly when the interest of the individual or the 
state required it, — a principle of action, it may be remarked, 
differing considerably from the more generous and self-devoting 
gallantry of the modern. These were strong in Italy while 
Italy was the governing power ; but even they gradually dis- 
appeared as the provinces were amalgamated with it, and 
Italians ceased to be the conquering soldiery. 

It were needless to enlarge on a subject so well known 
as that of the general corruption of Eoman manners, from the 
time of the first Csesar. Venality and licentiousness may be 
said to have been universal. I shall confine myself to one 
particular, as marking sufficiently the declension of those prin- 
ciples on which the strength of the effective desire of accumu- 
lation mainly depends. I allude to the decay of the family 
affections, of which evidence everywhere meets us. The men 
did not wish to be fathers, scarcely did the women wish to be 
mothers. The joys of the relation were to them too small, to 
be a compensation for the sacrifices it . demanded. The bring- 
ing up of children cost the one parent too much money, and 
took from the other too much pleasure. If families were 
raised up, it was not from the natural influence of the parental 
affections, but in obedience to the laws, that the man might 
have the approbation of the magistrate, and that there might 
be citizens to the state. They lived, not in others, or for 
others, but for themselves, and sought their good in enjoy- 
ments altogether selfish. It was their aim to expend on their 
own personal pleasures whatever they possibly could. It would 



% INTKU NATIONAL DIFFEHKNC KS 

vSiHMii ;is if llu> lu.iuuity. t'ouM llit>y \\a\o Unckuowu {\w ox;U't. 
linuts t>r llnMV li\t>s, would h;i\t> luadc iIumv rorhincs niul IhtMU 
tovmiuiito 10L!,iMh(M'. As tl»t»y I'tuUd uol do so. tin* l\nlmu<s of 
niiiny ondod IhM'ovi* (Iumv livi\s. as (ho fovtinn>s of othors \uAA 
out boviMid ihoir livi»s. To r«\ii», ho\vt>\ tM , I IumusoIvos, whili* 
alivo, ;dl possiblo boiuMit. from what (hoy ini<:;ht I'liam-o (o 
loa\o i>(htMs (o iM»jt>y aftor tl»oir diM(h, (lioy tM»i'i»ura;j;(Ml soino 
oi \\\o UKMuluMs i^i a d(\spioahlo olass win* stvin (o ha\o oonsti- 
U\[i\\ wo iiu'oMsidorahlo i>avt o( Koinau soi.'io(y. Tarasitoa 
n^nlv (o minis(»M' (*» ovory |>loas\iro, and to povfonn ovorv 
}>ossibU» siMvii'o, waitod on (l>o man of wealth, in (lu< ho|>o and 
o\piv(a(i*>n oi (Mjjoyinj;' a jtordon of i(. aftor liis doaih. 'V\\o\ 
woro moro dosirahlo than I'hildron. hoth hooanso thoy wi>ro 
aMo to givo soim*(hin;j[ mon^ than nuMi> unsnhst^intial alVootion 
ai\tl ostotMU. and hooausi> tluw' wort' willin>;- to ^ivo it, whih^ a 
son in* da»iu;htor mi^ht imagino ihoy hail olaiins to nn'oivo 
what thoy co\\\d noi lio said \o havo lahorod i'or. Tho jioots 
an»l satirists o( iho Ani;iistim' ago. and y^i suhsoqnont. timos. 
ci\o sutVioiont ovidoni't* oi tho »'\istonro of a stati\ ovil in 
itsolf. anil tho foionnutor oi many iwils.' it >j;avo oooasi(M\ to 
tho law lompolling parents to loa\o thoir ohildron a I'ortain 
part, a fourth, of tl»oir pri>)uMMy. Its pnwalonoo may ho 
Judgotl t^f hy tho wortlin;;' oi {\\o onaotmouts ii\oroasin;4 tho 
ohildron's sharo. It is statod, as a faot woU known, that 
paronts gonorally oithor disiniiorit. or omit thoir ohiKlron in 
thoir wills, lo.aving tho Indk oi thoir propoity to dist,ant rolji- 
tii>ns, tt> sti.angvrs, or \o slavos, [o whom thov uixo frooilom ; 



' H(Mi»v"o, V. Srttiiv, 11. Uook. li is wortli w hilo olisorviuj;, th.it, .xoivuttiui; 
to tl\is satiiv, to olirtit tlioso jwrju^itos iutv> tho sorviiv, l>y l\oltlin4; out ft 
ivwiUtl thov wow novor to jjot. was ivokotiod .•> tlnujj to l>o laujihotl at, — 
I'robal^ly tlio prftotivv oxistod from a vory oarly ago. tlu>\ii<l> 1 oannot givo 
nutl>o>ity for it. Varasitos aro in I'lautus' IMays, Inn (hoso aro in a givat 
nuN»s\n\> translations. Tho following »|Uotrttion f»\>n» tliat anthor, liowovor, 
oxpivssos a fooling, whioh 1 shouUl supj>oso pivvailotl iu Uouxvn sooiety at tho 
tuno : 

" Quftutlo haluM nn>ltt»s oognativ^, quiil opus niihi sit liboris. 
Nuno Ihmio vivo ot fortut)ato, atquo anin»o ut hilvt, 
Moft botia tnoa niorto oognatis vlioani intorjv»rtitvnt, 
lUi aputl nu> tnlunt, mo ourant, visunt nuiil agai\>, ovvjuid volini. 
Qui niihi inittuut nuuiora, ;ul j>r,'\nvHuui, ail o;ouan» viu-.-int." 



IN ACCnMnLA'J'IVK STRENGTH 07 

aiifl Uiat UiuH, if Ihoir family in numoroiiH, they, who during 
U)(! Iif(;lirn(; of Uicir father enjoyed aflluence, find that hiR 
deatf) leaveH them in poverty.' 

Notfiing, Hiir(;ly, ean more elearly nhow the extreme and 
p(!rva(Jing HfjlfiHhneHB of tfie time, than its hecoming neeen- 
8ary for tfie magistrate to eompel the citizens to marry, an (J 
also to compel them to leave portions to their children. 
The existence of such a state of things implied a degree of 
isolation of feeling and actir)n, so great, as necessarily to 
produce general w(;akness and decay. The general selfish- 
ness (jf the principles guiding the conduct of individuals, 
may ]>(i gathered from a prevailing proverh, " when I die let 
tfie world hiirn.'"'^ When such were the maxims ruling 
Bof;i(;ty, th(;re could not fail to he a heedless sacrifice of the 
luU'SdHlH of fntiirity, an exhaustion of the means or instru- 
MientH wliich ih(; I'onithought of previous generations had 
ciiiploy(!d indiisLry to accumulate, without any correspond- 
ent reformation of tlxim. Sallust, in a fragment quoted hy 
Montesfjuieu, well descrihes the men of Piis day as a race 
who could neither themselves hold property, nor allow 
others to retain it.'* Only such instruments could con- 
sequently h(! formed as were of very quickly returning 
orders, and, as the vigor of the accumulative principle 
decayed, the memhers of each succeeding generation saw a 
iii;i,H,s of materials f;i,ll from their grasp, which had afforderl 

' Quia plcrurriquc parente« sine caiina liberoa suaH exherodunt vel oiriittunt. 
/■iiM. Lib. II. Tit. 28. Capiunt quidem cognati omnia, et cxtranei, vel cum 
libcrtate servi ; filii vero licet multi consistant ; etiamHi nihil oflendcrint 
])arcnte8, confunduntur, etc. Novel. XVIII. I'ref. 

''' 'EyitoO OavbvTOS yaia /itxO-ljTw irvpl. Siiet. A similar proverb " apres nous 
Ic d('iluge," is said to have been often in the mouth of Madame Pompa- 
•loiir, one of the purest self-worshippers ever existing. It is perhajjs 
worthy of remark, as showing the propensity of selfishness to grasp the 
present, that both the Jiomans and the lady were very prodigals even 
ill what was entirely their own. The former it is well known rapidly 
exhausted their constitutions by every sort of debauchery and excess, 
the latter was as little economical of her personal charms. At twenty 
her lips are said to have Vjeen livid from the too constant application 
of her teeth to make them pout, at thirty she was haggard. 

^ " Merito dicatur genitos esse, qui nee ipsi habere possent res familiares, 
nee alios pati." 

G 



!)S lNri:ilNA'l'l()NAL DM' I'llUKNCKS 

a phnit/iriil supply l<> tlif wauls of (heir iiiinc pinvidciil. 
roicratlicrs.' 

Tlic means ol' ,sii|iporl in;;, liiiiiian lil'i- diiiiiiiislKMl, uiid lli(» 
iiuiiiIkm-s of niimUiiul tliiiiiiiislicd with Ukmii. WIkmi vice 
il.Hcir did iiol, sid1i(i(Milly clicck Ui(> u,'i'«>\vl.li ol' l.li(> cU'iiKMd.K 
(>r lil'(>, i|. liioiii^lil waul and rainiii(> (o its asHistaiicr. Tlic 
liistoiy (>r Mi(^ IJomaii world imdtM' iJic ('a'Ha,i'H, i.s a mtdan- 
ciioly (h^liiil of tli(^ ^^ludually ({(M-ayini;' I'linds of Mai l<iiupir(\ 
and Mir !.',ia.dnally dt'cirasini;' imiultcrs of ils inlialiitaiils. 
lUily, according; In I'liiiy, and otluir wriUn's, waH in thn old 
limrs iM'ONvdt'd witJi |H>opl(>, tliickly set. will) cit-ics, and rich 
in all lhiii;';s ministering to tli(^ needs of its inliai>ila,nls. In 
lii,s day, its diminished |)opnlalion depended I'oi- their sus- 
tenance^ on the pioductions of other t(Miitories. TIk^ chan};"t> 
certainly was not owiuLi, to any alteralion in the mal(M'ials. 
" Non fatiL^al-a an(, etlo'ta hiinius," says Columella. The 
oaj'th would ha\t> yielded the same riMurns, had they who 
poHSOHStnl it heen willint!,' to expend what was necessary to 
j^ivo it the I'apacity of yitddini;' IIumu. As th(> luatei'ials 
\V(M'«' only wi'onght up to xcry (pn(d\ly i'(>turntng ordtu's, 
Wu'V had nec(>ssarily a nuicli smalliM' capacity, and thc^ 
iinniial rchirns maih^ l»y I hem wow of constvpuMict* much 
less. I'asturc took pla.ct» of tillagi* ; corn was hronght. from 
the pro\inces; and when the supply I'aileil famine eusiu'il. 
hlven the construction of ships for lh(> Iransptut of this, 
and other mei'chandise, would S(>(>m to lia\i' heen an (Mlort 
to which the acriimnlati\ c princi|il(( was scarcely eipial. 
It was found necessa,r\ to enconragt' it h\ rewai'diuL!' those 



' |S(>\ I'lal >\iilt'r.s liavc iiMi'iiluul tlic I'.iil of Ivoiiic on its «<oouomu' «iilo, to 
tho <liaiiiiiij; away »>f luoiioy (o tlio VmM. iii pii} iiuiit foi' inii»orti«l liixmios. 
'V\\i» wan not a Hopaiatc and (li«t.in(!t oauHO «)f lUn'linc, Imt fat Inn- ono of its con- 
(U)niilant'H. It is hut oiut of tlu^ pliastm of tint ^tMiiiial ami fnnilaniontal oauso 
wliii^ii Ivao M(its forth. 'l"iu< wtoi^k of nitUaMii' nuuu^y o( a I'onmninity i.s a 
Hoi-ial in.sti iinu'iil, the " inMti'iini«>nt of a.sHoi'iation," as Henry C. Ciiroj' 
aptly rallod it, uml it in stHuirtd in tho lirst phioo luul kopt up aftii 
waidH in tl\o Hanio nianiior osMotUially aH otlior inHtiuniouts hy in(hi«l i \ 
anil llio oxoiciHO of tlu' aoouinuhitivi' piinoipio. Tho proHont-ihiy arjjuintui . 
aH (c> tho oonipatalivo uniinportanoo of nu)io ov less uuuioy, do not apply to an 
ago when oxton.sivo aroa.s woro liipslni^ ffoni a nioni'v oconomy to a stato of 
hartor. 1 



IN AccnMiiLA'iivi: s'i'i{i<:N(/rn !>9 

who ])r()HO(',iit,(Ml Um,(/ Itr'tuicli of indiiHlry.' Somol/iiiidH huul 
formerly (',iill/ivii,l;(Ml w!i,H ii.llowod U) lio (Miiir'oly wn,Hl,o, jukI 

|)II,HH(mI !l,II.O<i,'(5lJl(ll' oil!/ of l/lio c.l.'I.HS of illHLrUllMMltH. 'ril(i fol'CHli 

luid wil(l(!rii(iHH <i;iuii(Ml on I, ho h'(MmuiH, iiH (ilioy would now, for 
Hiiiiil.'u- I'ciiHoiiH, on iui lii(h;ui population, woni Hoinc^of l.h()H(i 
l,rih(!H pid, ill poHHoHHioii of I, ho doinainH, lUicionMy ih(5 propoiiy 
of Ui(!ir lac.o, jU> proHcud/ yioi(hii[i,' ahiindanlly to Uio providoid; 
in(hiHl,ry of iJio whit.cs. Iliid (Jioro Ixioii no ii'rnpfion of Uk^ 
harhariauH, iJio Minpiro iiiiimI, h;i,vo |ioiinh(',d, nioro nlowly poi'- 
hapH, hut ii,H ccMtiunly, from tho op(M'ation idono of thoH(^ 
int(H'nal cjuihom of docAiy. Thoy wcm^ ooc.aHioninji,' ft, prof^roHHivi^ 
diminid,ion of tho capac/ity whioli mn,t(^ria,lH fornujr'ly pohhohhcmI. 
ThuH, it is to the ItomjuiH t)honiH(ilvoH an much iiM to tho hac 
hiui.'uiM, thid, tlio doHtrucXion of th(» pidilio odilicoH in to ho 
aHoi'ih(',(|. Tho HtonoH woro ap|)nod to pi'iv;d,o |)Ui'poHoH. With 
tho capacity for yini(hn;j; ;i, ictnrn, there neceHHiii'ily pofiwhed 
tho return yi(5ld(Ml, and the pow(!r, conHofpiontly, of nin,int(Un- 
iiijj; tlic Manio nundior of men, ;uid coid^rihid-iufj,' an o(piid 
iUiiount to the vvantu ol' th(5 Mtato. Ii<'nce th<'. populid.ion of 
the Mmpiro, ;i,nd the imp(^riid r(^V(^nu(!, dindnit-ihed from ;i,}j,'e 
to ;i,n<!. 

Tlio diminution woidd hav(; hoen much more ni,|)id hid, for 
Honio countnractin}^' caiiHoH. liomo, while Hho coiupiorod and 
eiiHliived, ^jivo peace, and peac(i (ni)d)l(Ml the nrtH to jtaHH fi'om 
country to country, ;uid ofti^n, iiiidiir Iku' protection, eiuric!(l 
them to ref^ioiiH hefore h;irh;i,i'oiiH. A;j,iuii, hIio liiirHolf, ;iH nhe 
;i,i'a(hiu,lly ])roceeded to eiiHlave the rent of the world, and 
encircle it in her enipir(\ rec(!ived into Iku' Iiohoiii tlioHO 
who li;ul heeii I'n^i', or were the immediji,te deHccndaiitH of 
freemen, <uid r(^t;dned Honiethiii^j,' of iJieir vir'tiioH. The iin 
}j,'oVGrnahlo liceiitioiiHiujBH, Gxtrava}4'fuice, juid pronenoHM to evil 
of th(^ ItidiaiiH, weid tonipnrod by the ij;reat(!r decency and 
friij^idity of tho new 'incv, of many of the diHtant ])rovin(;eH, 

' Niuii el, im;^ol,iiit-()i'il)iiH (iorta luora propoHuilj, HUHOopto in ho (Iiiiiiih) h'i 
iiii ({uiil |i(ir (/rMi|i('H(,a(.()H accidiHHCtt ; cL iiavcH iiKH'OaLura) cauHa fabi'icanti 
l)iiH inii.)^iia (;()Iiiiii<i<Im, coiihI il.iiil. \)f() (;()ii<iil,i()ii(i (:mjiih(|U(i : cJviliiiH vacaLioiiiiiii 
IrgiH I'nppcm : r>al,iiiiM jiiH <,,>iiiiit,UMi : fu'iiiiiiiH jim (|iial,n()r lilxiroruKi ; (|uji- 
ooimt.il.iit.M, IkxIIo ,M(;rv.iiitiif. 

iSiKil,. ill vil-a (llaiidii, XIX, 



100 INTERNATIONAL DIFFERENCES 

who flocked in to recruit tlie diiiiinishing numbers of her 
citizens.^ 

These two circumstances, however, only retarded, they could 
not resist, the advancing degeneracy, poverty, and weakness, 
that were gradually sapping the foundations of the Empire, 
and exposing it to be overturned by external violence, or 
to fall to ruin by its own weight. While some of her 
provinces gave strength to Rome, she corrupted them ; if 
she gave them her arts, she gave them also her manners. 
Like liquor, already begun to turn, mixed with what is 
yet fresh, the defects of the compound were not at first per- 
ceptible ; by and by, the adulteration diffused through it 
wrought on the whole, and rendered it all alike worthless. 

The propagation of Christianity over the Empire is to be 
reckoned as another of the causes retarding its decay. It 
is to be observed, however, that this took place too late 
for reaping the advantages, which the morality of the Gospel 
might have otherwise conferred ; and that the corruptions 
of the times were so great as to lead its teachers rather 
to preach the duty of withdrawing from the world, than 
to inspire them with the hopes of remoulding the world to 
an accordance with a system of perfect purity of morals and 
benevolence of purpose. The effects of this cause were there- 
fore comparatively small. 

The reader will perceive that the subject we are upon 
might be stretched to an indefinite length. Circumstances 
have given to every community a peculiar character ; the 
moral and intellectual powers of every people have received 
different degrees of developement, and the continuance of life 
is more or less probable, and the possession of property more 
or less assured, in one country than in another. All these 
particulars vary the relations between the present and the 
future, in the estimation of the members of different societies, 
and would therefore determine each community to stop short 
at some particular point in our series, towards which, the 
strength of the accumulative principle may be said to cause 
the instruments it forms continually to gravitate. Unlike the 
^ Tacit. Ann. C. 55, L. III. 



IN ACCUMULATIVE STRENGTH 101 

operation of gravity, however, the force with which they tend 
to this point diminishes, as their distance from it decreases, 
and the farther they are removed from it, the greater the 
rapidity of their progress towards it. 

The subject would not therefore be fairly exhausted until all 
the circumstances of the moral and intellectual state, and other 
particulars of the condition of every people, had been examined, 
and compared with the extent to which the formation of instru- 
ments among them is advanced. Enough, however, has perhaps 
been done to show, that this principle is of very extensive 
operation, and that in our subsequent inquiries, we are war- 
ranted in assuming the strength of the effective desire of 
accumulation to be a circumstance of primary importance, 
in the determination of the extent to which the formation of 
instruments will be carried in any society. We should now 
proceed to examine the more important effects resulting from 
variations in the strength of this principle in different members 
of the same community. It is however necessary first to con- 
sider some phenomena produced by the progress of it, and 
of the inventive faculty, and certain classifications of instru- 
ments and names applied to them, which have thence arisen. 
This will form the subject of the next chapter. 



CHAPTER Vlll. 

OF THE DIVISION OF EMPLOYMENTS AND OTHER PHENO- 
MENA PRODUCED BY EFFORTS TO ACCELERATE THE 
EXHAUSTION OF INSTRUMENTS. 

Every individual endeavors to exhaust, as speedily as he 
can, the capacity of the instruments which he possesses. By 
rapidly exhausting the capacity of any instrument, the returns 
yielded by it are not lessened, but quickened. The powers it 
possesses to bestow enjoyment, or to aid in the formation of 
other instruments, are not diminished in quantity, but sooner 
brought into action, and it passes to an order of quicker 
return. When therefore the efforts of individuals, so directed, 
are successful, by placing the instruments operated on in more 
quickly returning orders, they stimulate the accumulative 
principle to give greater capacity to instruments of the sort, 
and proportionally increase the capacity of the whole stock of 
instruments owned by the society. It is to certain phenomena, in 
the production of which these two circumstances are the main 
agents, that we have in this chapter to direct our attention. 

As the knowledge which mankind possess of the course of 
nature advances, and they discover a greater number of means 
to provide for their future wants, the instruments they employ 
for this purpose become very various. The exercise of the arts 
of the weaver, the blacksmith, the carpenter, the farmer, 
implies the existence of a great variety of tools with which 
they may be carried on. But, as a man can only do one thing 
at once, if any man had all the tools which these several 
occupations require, at least three-fourths of them would 



OF SEPARATION OF EMPLOYMENT 103 

constantly lie idle ^ ^^.j,,^, j^ ^^^^ 

were any soo.ety to ex^ ^^ere each man had aU these to s 
and alternately carried v-, p„^i- . ,, "'^^^^ mois, 

members of it should if ^ v occupations, that the 

each restricting himself '.^^^^^^^^^^ J^^ -^«^g«t them, 
There would then be no s° T^ P^^f "^^^ employment, 
tools would form an instrume'^''^^' implements, each set of 
and therefore of an order of .^^'X T' 'Pf ^^^^^ ^^^austed, 
cases where this could be done, '^'' '^^™ ^^^^ before. In 
the advantage of it. When, for''^" '^"^^ ^^^^d point out 
to be worn out, he would go to hil, *:'''-^f ' ^ ™^^'« ^oom came 
not make another loom if you w'S^^^or ^nd say, "I shall 

T • • ^- t' undertake to do whnf 

weaving I may require ; m return J- ,i . wnac 

produce of my farm, or will do some b.,^^^® ^°^ ^o^e of the 
The offer would be accepted, and sim "^'^^^ ^o^k for you." 
throughout the society, each individual i, "motives operating 
industry, as far as possible, to the emplo>^°^^^^^ confine his 
ticular set of tools or instruments. It is 1^ °^ ^ome par- 
[obvious], that this was the manner in whiclf-™^P^ likely 
occupations with which we are now familiar '. division of 
produced, but it must evidently have been proi^origmally 
way, had it not been otherwise brought to pass, ^^ this 
in fact, that even now it is thus brought to pass in t^^® see, 
of settlements in North America. In such situatic^^ress 
man is at first probably obliged to be his own cai^ry 
glazier, tanner, cobbler, and perhaps to a great extent hit,', 
blacksmith. As the settlement fills up, and the popula..^ 
becomes sufficiently dense, he gives up this multifario*, 
industry, and takes to some particular branch. The advan- 
tages of the change to the whole community, and therefore to 
every individual in it, are great. In the first place, the various 
implements being in constant employment yield a better 
return for what has been laid out in procuring them ; being 
sooner exhausted they pass to a more quickly returning order. 
In consequence, their owners can afford to have them of better 
quality and more complete construction ; the effective desire of 
accumulation carries them on to a class correspondent to its 
own strength. The result of both events is, that a larger 
provision, is made for the future wants of the whole society. 



104 OF SEPARATION OF EMPLnMENTS 

Such a revolution can only have place where the individuals 
exercisinc^ the different employments, 1 ve a ready communica- 
tion with each other. In situations/rhere they cannot easily 
communicate, either from distance, (^ difficulty of transit, such 
exchancres cannot take place.^ ^a man had to go twenty 
miles for every little piece of c^'^enter work that he wished 
executed it were better for hi>^^o keep a few carpenter tools 
of his own Neither is it Lelj to take place extensively 
unless where the accumuAve principle has considerable 
strenoth and where, cons^^ntly, a large amount of labor is 

^-L.^ ;-^ fVio qpvpr implements in use. Where, as in 
wrought up m tne sevet r 

•.-r. 1 i. fi,r^ inoin i's/rely a lew sticks, it would save one 
Hmdostan, the loom ^r J ^, ' r. , • t^ 

. T -T 1 ,.^T.-.7 liti-lp t/^ploy another to weave tor mm. it 
individual very iittie v f j 

J- ^Ur in rA tries where the population is most 
is accordingly, m c" ff 

i.1, f^oiiifiT f ommunication greatest, and instruments 
dense, the facility r 5 . 

, ^ ^l^iore slowly returning orders, that employ- 

ded 
ments are most 

livi=-' *^^ employments implies the existence of 

^/cer, so, as it extends, these exchanges become 
exchange or ' ' ' ^ 

•1 ye frequent. Every man, to procure the supply 
necessarily , i . 1.1 • r 

^us wants, has to employ the services 01 more 

. . ^^J'thau he had before. The farmer, who used to 
•Ve his own cloth from his own fleeces, transfers these 
/pue else, and perhaps, after they have passed through 
^hds of the carder, the spinner, the weaver, the fuller, etc. 
fof them returns to him again in the shape of cloth for 
/le garment that he is in need of. In an advanced state of 
/ciety, very few wants are supplied but by articles or instru- 
ments which have passed through many hands. We can 
scarce then fitly pursue our subject, without some examination 
of the manner in which these exchanges take place, and of the 
rules by which they are regulated. 

As all instruments exist solely to supply wants, so any man 

^ [In Carey's terminologj', separation of employments depends upon the 
"power of association." He believed that through an excessive scattering out 
of the people into the backwoods settlements in his day this power, and 
therefore its advantages, were in great measure lost. Compare Edward Gibbon 
Wakefield on the "barbarising tendency to dispersion" in all frontier com- 
munities.] 



AND THE SYSTEM OF EXCHANGE 105 

will consent to receive an instrument in exchange, or expect to 
give it in exchange, only as it is a means of supplying wants. 
It is the business of every man to adopt the readiest and easiest 
means he can devise to supply all coming needs, and it is 
solely because the medium of barter [exchange] presents the 
readiest means of effecting this end, that he adopts it. 

But labor is the fund which all men have, out of which to 
supply their wants. Some have other funds besides, but every 
man has this, and strip a man of every thing adventitious, this 
alone remains to him. It is this, then, which a person may 
most fitly be said to expend, in provision for any future want. 
When one man exchanges this for that, he may be said to give 
the labor which he has expended on this, for the labor which 
has been expended on that, and labor for labor would seem to 
be the most simple of exchanges. It never, as we shall see, 
exactly takes place, but sometimes it is nearly approximated 
to, and, that we may set out from the most simple elements, we 
may suppose that it is actually arrived at. 

Any man will be inclined to exchange one instrument for 
another, if, by so doing, he can save himself any part of the 
labor which he must otherwise expend in producing that other. 
A lives in some place where willows are to be had for cutting 
them ; he employs himself in making willow baskets, one of 
which he finishes in two days ; B offers him a straw hat for it. 
If he wants a straw hat, and thinks that, were he to set a 
making one, it would occupy him more than two days, and 
moreover, that neither D, E or F, who make straw hats, will 
give it for less : he will be inclined to make the exchange. In 
doing so, it is a matter of indifference to him what time B may 
have expended in making the hat, his only reason for entering 
into the transaction, is the saving of labor to himself he thereby 
effects. In reality, however, it is altogether likely that B 
has not expended more than two days in making it. For, 
supposing, as in this case we may, that both A and B have the 
same natural faculties, B, were he to set about making willow 
baskets, could make them as well and as easily as A, that is at 
the rate of one in two days. If then the straw hat cost him 
more than two days' labor, he would rather make a willow 
basket for himself than exchange his straw hat for it. Even if 



101) OF SEPARATION OF EMFLOYMENTS 

he had not the manual skill necessary, he would apply himself 
to acquire it, and take to the occupation of basket-making in 
preference to that of making hats ; as we see, in employments 
where mere labor is concerned, that one is deserted for another 
according as it gives less or more wages. 

It so comes to pass that in the same society, in all exchanges, 
as far as we can conceive mere labor to be concerned, one man, 
A, barters that which has cost him two, or twenty days' labor, 
with that whicii has cost another, B, two, or twenty days' 
labor. We must however bear in mind, that neither does A 
oifer the article, nor does B receive it, simply because it has 
cost two, or twenty days' labor. A olfers it, and B receives it, 
because it is an instrument to supply future wants, and under 
the supposition that it cannot be got for less than two or 
twenty days' labor. In such cases, the person desirous of 
making the exchange may indeed say to the individual with 
whom he wishes to exchange, — Sir, I assure you the article 
oost me two, or twenty days' labor, as the case may be ; and 
being assured of this, the person so addressed may think it 
sutlicient grounds to make the exchange, and may so conclude 
the bargain. But he does so, not because the other has 
expended two or twenty days' labor on it, but because, he 
having expended this, he concludes that it cjinnot be got for 
less ; that if it has cost him two or twenty days' work, it would 
have cost any other, and would cost himself, the same 
labor. If he knows that the person desirous of exchanging is 
an unskilful or bungling workman, or if he sees that the labor 
has been injudiciously applied, he will not give what is 
demanded. He knows, in that case, that he can make it, or 
get it made, for less. Were one to employ himself in rolling a 
stone up hill and down hill for a month together, he would 
leave it as useless to him in the way of exchange as before he 
put his hand to it. 

It may be laid down as a rule, then, that in as far as labor 
simply is concerned in all exchanges, one thing will be bartered 
for another, not in proportion to the labor that has been 
respectively bestowed on each, but in proportion to that 
which it is necessary to bestow on materials, similar to those 
of which oaeh has been constructed, to make other articles 



AND THE SYSTEM OF EXCHANGE 107 

equal to them in capacity to supply wants ; that, if this 
basket exchanges for that hat, though each may have cost 
two clays' labor, it is not exactly because each has cost it, but 
because neither a basket equally good as the one, nor a hat 
equally good as the other, can be made for less than two days' 
labor. 

As a corollary from this, it follows that, whenever an article 
comes to be made with less labor than formerly, articles of the 
same sort which may have been previously manufactured, pro- 
cure for their owners less of other articles in exchange than 
they did before. They exchange, not for what labor has been 
actually wrought up in them, but for what is now required to 
make others similar to them. Thus, supposing that a basket- 
maker, say in some settlement in North America, having to go 
on foot a considerable distance through woods and swamps for 
his willow twigs, requires one day to procure enough to make a 
basket, and that he takes another to work them up, he would 
then probably receive for each basket two days' labor, or 
articles having cost two days' labor. If now, however, a place 
where equally good willows grow is discovered near at hand, so 
that only half a day is required to get enough for a basket, and 
if this is generally known, he will no longer be able to exchange 
them at the same rate, because, as we have seen, other people 
would make baskets for less, that is, for one and a half days' 
labor, or for articles in the fabrication of which the labor of one 
and a half days had been expended. Any stock then he might 
have on hand of baskets made previously to this discovery, 
would only exchange for articles requiring for their fabrication 
the labor of a day and a half. The same rule that applies to 
this trivial instance, holds good in affairs of greater importance, 
and regulates a large amount of exchanges. 

It can however never exactly happen, that labor will be ex- 
changed, in this simple way, for labor. The formation of every 
instrument, besides labor, requires also the assistance of some 
other instrument. Even the basket-maker and the hat-maker, 
allowing them to get the twigs and straw they require, for the 
trouble of collecting them, would need, the one at least a knife, 
and the other a needle and thread. Auxiliaries so inconsider- 
able as these need scarce be noticed in the reckoning ; but 



108 OF SEPARATION OF EMPLOYMENTS 

there are cases where these assisting instruments may be said 
to do a great part, others, in which they may be said to do 
nearly the whole of the work. In a steam-boat the engine 
may be considered as the great laboring power, though 
the services of the men who supply fuel, and regulate the 
motion of it and of the boat, enter also largely into the 
account. In a set of well-contrived, and well-finished pipes, 
for conducting water through a city to the different houses 
in it, the amount of human labor entering [directly] into the 
process is very trifling. 

A weaver we shall suppose receives thread to weave into a 
piece of linen, and finishes the job in thirty days. Were he 
now, in return, to receive from his employer simply thirty days' 
labor, he would get too little ; for, his loom being an instru- 
ment partially exhausted in fabricating the linen, this exhaus- 
tion ought to form an item in the account. Suppose that the 
effective desire of accumulation of the individual, is of strength 
sufficient to carry him to the order G, doubling in seven years, 
that the loom cost one hundred days' labor, and that it will be 
exhausted in seven years ; it would then require to return two 
hundred days' labor, or an equivalent, at the end of that period. 
The return however is not delayed so long, but begins to come 
in daily, immediately after its construction. Calculating then 
what yearly return is equal to two hundred days at the end of 
seven years, in the estimation of a man who reckons one day 
now equal to two then, it will turn out to be nearly twenty 
days. "We may allow that the loom is in employment three 
hundred days a year, it would therefore, on these principles, 
have to return two days' labor, for every thirty days during 
which it was in operation, and the weaver would consequently 
have to receive an equivalent to thirty-two days' labor ; at least 
had he not a moral certainty of receiving this, he would not 
have formed the instrument, and were such return to cease he 
would not reconstruct it. 

The transport of goods by sea is an event brought about as 
much by the agency of instruments, as by direct human labor. 
A vessel costs, we shall say, five thousand days' labor, is 
exhausted in seven years, and is navigated by three men. If 
she belongs to a person whose effective desire of accumulation 



AND THE SYSTEM OF EXCHANGE 109 

carries him only to the class G, and supposing those who 
navigate her to be paid for three hundred days' labor, she must, 
on these principles, return about nineteen hundred days' labor 
annually. Say she is freighted to carry a cargo of timber, and 
that the voyage occupies three months. This transport being 
a part of the process of the formation of certain instruments, 
houses, furniture, etc., as necessary as any other part of it, the 
owner will therefore receive directly, or indirectly, from those 
engaged in their formation, an equivalent to not less than four 
hundred and seventy-five days' labor. 

It is to be observed, too, that, even in cases where labor 
alone seems to be paid for, time generally also forms one of the 
items to be taken into account. Thus, an individual contracts, 
within three months, to fell the trees on a certain piece of 
forest land in a North American settlement. If then he be 
paid at the commencement of the three months, he will expect 
to receive less than if payment be deferred until the expiration 
of that time, and the difference between the two amounts will 
be regulated, as in other cases, by the particular orders to 
which instruments, in that particular situation, are generally 
wrought up. The same things hold good in all instances where 
labor is paid for by the work executed, or, as it is termed, by 
the piece. 

The division of employments and consequent prevalence of 
the system of exchange, occasions a particular classification of 
instruments. 

Before the division of employments takes place, the instru- 
ments which every man forms, or causes to be formed, are for 
his immediate use, and after it has taken place, the portion in- 
dividuals reserve for this purpose makes still a considerable part 
of the whole of the instruments belonging to any community. 
Even the poorest beggar has some clothes to cover him ; the 
opulent have houses, furniture, clothing, gardens, pleasure- 
grounds, &c. This part of the whole mass of instruments 
possessed by individuals or communities, is termed a stock 
reserved for immediate consumption. 

The remainder of the general stock of instruments of indi- 
viduals and of societies, with the exception of land, considered 
not as actually cultivated, but as having [been given] a 



no OF SEPARATION OF EMPLOYMENTS 

capacity for being cultivated, is termed capital. The instru- 
ments to which this term applies supply the future wants 
of the individuals owning them, indirectly, either from being 
themselves commodities that may be exchanged for articles 
directly suited to tiieir needs, or by their capacity of pro- 
ducing commodities which may be so exchanged.^ 

Capital itself is again subdivided into Jl>xd, and circulating 
capital. Fixed capital consists of instruments which have 
a capacity for producing commodities to be exchanged, but 
are not themselves formed for the purpose of being exchanged. 
Circulating capital consists of commodities fitted for being 
exchanged, or of instruments in process of formation into such 
commodities. 

It often happens that the division between tixed and circu- 
lating capital is drawn with difficulty, some instruments 
belonging partly to the one, and partly to the other. Thus a 
horse employed for agricultural purposes is a part of fixed 
capital, while an ox may belong partly to fixed, and partly 
to circulating capital, as he is reared and fed, in part for 
the services expected from him as an animal of draft, and 
in part for the price his carcase brings. 

The total instruments owned by an individual, or a society, 
and comprehended under the terms a stock reserved for im- 
mediate consumption, fixed and circulating capital, have 
received the general appellation of stock. 

All instruments, whether comprehended under the divisions 
capital fixed and circulating, or a stock reserved for immediate 
consumption, possess a capacity for supplying the wants, or 
saving the labor of man. But the wants which they supply 

' [Apparentlj^ Rae excludes laud, cousidered as the basal iustrunieut of 
agriculture, from the category of capital, because it is au iustrunieut of 
" iuderinite period of exhaustiou " aud yields iucome in the forui of rent 
instead of iuterest or profit. It is important to observe that Rae makes no 
use of the specific definition of capital here given, which follows closely the 
lead of Adam Smith. His working concept of capital coincides with all 
stock. The title of this second "Book," it will be remembered, was: "Of 
the Nature of Stock and of the Laws Governing its Increase aud Diminution." 
This reprint would have been called the Sociological Theory of Stock, had 
that boon a tormiuology which would speak to tlie present generation of 
readers.] 



AND THE SYSTEM OF EXCHANGE 111 

and the labor which they save, are in general not immediate, 
but future. Now we cannot estimate the same amount of 
labor saved, or wants supplied tomorrow, and five, or fifty 
years hence, as equivalent the one to the other. Thus if we 
compare together a hundred full grown trees, and as many 
saplings, it may be, that, estimated in the supply they yield 
the wants of futurity, they are alike. If the former be 
cut down tomorrow they may yield a hundred cords of fire 
wood, and if the latter be cut down fifty years hence they 
may yield the same. We should not nevertheless conceive, 
that they were equal the one to the other. What measure then 
are we to adopt for comparing them and other such instru- 
ments together, and thus finding an expression in a quantity 
of immediate labor for the whole capacity of instruments 
possessed by any community or for the whole stock of that 
community ? The natural measure would seem to be the 
relative estimate, which the individuals concerned themselves 
form of the present and the future, that is, the strength of the 
effective desire of accumulation of the particular community. 
Thus in a community whose effective desire of accumulation 
is of strength sufficient to carry it to the formation of instru- 
ments of the order E, doubling in five years, an instrument, 
which at the expiration of five years yielded a return equiva- 
lent to two days' labor, might fairly be estimated as equivalent 
to one day's present labor ; if at the expiration of ten years it 
yielded an equivalent to four days' labor, it might also now 
be rated at one day's labor, and so for other periods. This 
therefore is a mode of expressing in present days' labor the 
whole capacity of the instruments owned by any society which 
will be made use of in the following pages ; and the terms, 
the absolute stock, and absolute capital of that society, will be 
employed to denote it. 

The mode, however, in which the fixed and circulating 
capital and stock belonging to societies is usually estimated,, 
is different. It is usual to estimate the instruments belonging 
/to any society, by comparing them with one another as they 
actually exchange, some particular commodity being made 
choice of as the standard to which all other instruments 
are referred. To capital and stock estimated in this mode. 



112 OF SEPARATION OF EMPLOYMENTS 

the terms, relative capital and stock of societies, will be 
applied. 

In cases where the effective desire of accumulation of a 
community has had opportunity to work up the materials 
possessed by it into instruments of an order correspondent 
to its own strength, the absolute and relative stock must, 
it is obvious, agree ; but, in cases where the accumulative 
principle has not yet had time fully to operate, the former 
will exceed the latter. Thus, were we to suppose the returns 
made by the whole of the instruments belonging to a society, 
or their total capacity, to be suddenly doubled, without any 
addition to the labor employed in forming them, the total 
absolute stock of the society would also be doubled, while its 
relative stock would remain unaltered. The relations of the 
several instruments possessed by it remaining the same, what- 
ever commodity had been adopted as the standard, when 
applied to measure the others it would give the same results 
as before. It never, indeed, can happen that any increase 
to the capacity of the instruments forming the stock of a 
society, so great and sudden as we have supposed, can take 
place ; but however small such increase, it would have a 
real effect, and would occasion a difference in the amount 
of the whole stock as estimated in the one or the other 
manner. Every such increase is effected through the opera- 
tion of the inventive faculty, and we shall therefore defer the 
consideration of the effects flowing from it, until we come 
to treat of the phenomena resulting from the progress of that 
faculty. 

Though the division of employments consequent to the 
progress of science and art, and the operation of the accumu- 
lative principle, on the whole greatly accelerates the exhaus- 
tion of instruments, there are yet some particulars in which 
it tends somewhat to retard that exhaustion. In the most 
simple state of society, when art is so rude, and accumulation 
so little advanced, that each individual forms almost all the 
instruments he himself or his family exhaust, and when, con- 
sequently, the general stock of the community is nearly 
altogether a stock formed and reserved for immediate con- 
sumption, it can seldom happen that there will be either an 



AND THE SYSTEM OF EXCHANGE 113 

over abundance, or a deficiency of instruments of any sort. 
As each individual can make an accurate estimate of his own 
wants and those of his family, prudent men, in such a state 
of things, provide only the instruments that may be of use to 
them, and do not form any but such as they foresee will come 
into employment as they are formed. But when individuals 
ceasing to form only instruments directly supplying their 
own wants, give the greater part of the industry they can 
command to manufacturing commodities for the purpose of 
exchange, as they have not the means of calculating with 
equal accuracy the wants of other men, it occasionally happens 
that some commodities are produced in excess, and that there 
is a deficiency of others. 

When, again, the state of society is such, that each in- 
dividual forms almost the whole instruments he requires, 
there is very little transport of commodities from place 
to place. The amount of transport necessarily increases with 
the separation of employments. This forms another drawback 
from the advantages arising from the extension of the division 
of occupations, and system of exchange. On account there- 
fore both of many commodities being produced in excess, and 
of its being necessary to transport most from place to place, 
there are always, in such states of society, very many com- 
modities lying idle, being neither under process of formation 
or exhaustion, but collected in masses at different points, 
waiting till some vacancy be found for them. The longer 
they continue in this state the farther they must pass towards 
the orders of slower return, and the more the operation of 
the accumulative principle must be retarded. 

It seems to be chiefly from the desire of obviating some- 
what these two disadvantages attending the general advance 
of art and industry, that, when the nature of the occupation 
permits it, individuals engaged in all the different divisions 
of industry place themselves as near each other as possible, 
and form villages and towns. Each can thus more easily 
adjust the amount of commodities he produces to the wants 
of other men, and thus also there arises a great saving of 
transport. 

It is also in a great measure owing to the necessity of 

H 



114 OF SEPARATION OF EMPLOYMENTS 

transporting commodities from place to place, and to the 
difficulty of regulating the precise amount produced consequent 
on the division of occupations, that there arises an order 
of men, that of merchants, devoting themselves solely to the 
business of transport and exchange. Merchants are the great 
exchangers of society, regulating the production of commodities 
and collecting and distributing them to situations w^here the 
never-ceasing processes of formation and exhaustion are pro- 
ducing vacancies for them. It is their business to make 
these exchanges with the greatest possible rapidity, and least 
possible expense. 

There is a general average time elapsing from the period 
of the formation of every commodity, until it pass from the 
individual having formed it, to the individuals who exhaust 
it in the supply of their wants, or employ it in the formation 
of other instruments. The merchant who efiects the transfer 
of commodities between the other members of society is 
entitled to receive an amount exceeding that which he gave, 
by the return which the labor embodied in the commodity 
exchanged should yield for this average time, according to 
the general rate of return of capital in the community. If 
therefore the superior intelligence, penetration, and activity 
of any merchant — giving him the power of foreseeing with 
greater accuracy than his brethren where vacancies are about 
to exist, and what will be their extent, and of discovering 
where the commodities proper to till them up may most 
readily be found, and most easily transported to the requisite 
places — enables him to effect these transfers with greater 
facility than usual, and within less than the average time, 
he will receive a proportionally greater return than other 
merchants. On the contrary, if, from a deficiency in these 
qualities, any merchant attempt the transfer of commodities 
for which there is no vacancy, or effect the transfer of com- 
modities for which there is a vacancy, at more than the 
average expense, or in more than the average time, the returns 
his capital yields him will be less than those usually received 
by the other members of the community. Mercantile energy 
is thus stimulated to effect all practicable exchanges with 
the greatest possible celerity, and at the least possible expense. 



AND THE SYSTEM OF EXCHANGE 115 

The activity which is in consequence given to the process 
of exchange, is a circumstance exceedingly beneficial to the 
interests of the community. By lessening the distance between 
the periods of formation and exhaustion, and diminishing the 
expense of formation (for transport makes a part of that 
expense), the successful exertions of the mercantile portion 
of society have a powerful tendency to preserve instruments 
in the more quickly returning orders, and to excite the action 
of the accumulative principle. Our subject consequently 
requires us to examine somewhat more particularly the 
mechanism by which the business of merchants is conducted, 
and the mode of calculation by which it is practically 
regulated. Our attention too is more especially called to 
these, because it is from the former that the principles of 
the present science of political economy are derived, and on 
the latter that its nomenclature is founded. 

The foundation of the mechanism of mercantile transac- 
tions is 

Money. 

Gold and silver, or, as they are called, the precious metals, 
are more properly entitled to the appellation of money than 
any other thing is, because they more generally pass for money 
than does any thing else. Their beauty, their incorruptibility, 
and some other of their qualities afterwards to be considered, 
have, in almost every country, rendered them the means 
of affording much enjoyment, that is, of supplying, to a 
large extent, certain of the wants of man. It seems likely 
that these qualities, joined to the facility with which they 
may be transported from place to place, first made them 
esteemed the most desirable of all commodities that one could 
possess. In the very frequent revolutions and commotions 
that occur in the earlier ages of society, articles that do 
not decay, can be hid, or carried off without difiiculty, and 
are always estimable, would naturally of all others be most 
coveted. They thus probably were first chiefly sought after, 
for the purpose of being retained, not for that of being ex- 
changed ; even yet in many countries, partly from old habits, 
and partly from still prevailing insecurity, they are chiefly 
prized as of all things, those best fit to be hoarded. But„ 



116 OF SEPARATION OF EMPLOYMENTS 

in whatever manner their use may have been introduced, 
or how much soever in some countries it may be dependent 
on a feeling of insecurity, at present or formerly prevailing, 
and prompting their possessors to keep not to part with them, 
they are now more generally sought for, for the purpose 
of being immediately passed away, forming, in the shape of 
money, the great medium of exchange; and it is solely in the 
part they thus act, that we have here very briefly to consider 
them. 

When, in the progress of society, men divide into different 
occupations, and each ceasing to fabricate himself all the 
instruments his wants require, barters the instruments or 
commodities he forms for those formed by others, the system 
of exchange, as we have seen, commences. The introduction, 
to a greater or less extent, of some sort of money, seems 
naturally to follow. For when a man forms only one sort 
of instruments or commodities, it cannot at all times happen 
that he can exchange them with articles fabricated by other 
men, and necessary to supply his wants, because these other 
men, the formers and possessors of what he desires, may not 
at the moment have occasion for what he has formed. " The 
butcher has more meat in his shop than he himself can con- 
sume, and the brewer and the baker would each of them 
be willing to purchase a part of it. But they have nothing 
to offer in exchange, except the particular productions of their 
respective trades, and the butcher is already provided with 
all the bread and beer which he has immediate occasion 
for. " ^ There are two modes by which the desired exchange 
may be effected. If the brewer and the baker have a com- 
modity received by every one for all others, such as money 
is, they may each give the butcher a certain quantity of it 
for a quantity of meat, and when he requires their ale and 
bread, he may, in turn, send back to them also a quantity 
of money. Or, the butcher may be satisfied with the promise 
of the brewer and the baker, that, at some future time, when 
he has occasion for it, they will give him a quantity of ale 
and bread, or of something else. These two modes of effecting 
the object form the two systems of cash, or credit, by which 
1 Wealth of ]\^ations, Book I. c. IV. 



AND THE SYSTEM OF EXCHANGE 117 

all the business of every country that consists not in barter, 
is carried on. 

Pieces of gold and silver coined, that is stamped with a 
mark regulating and assuring by the authority of the magistrate 
the weight and fineness of each, enter largely into transactions 
of the former order ; they make the bulk of the current coin 
of most countries. Supposing the whole of the exchanges 
of any country that are not simple barter, effected by money, 
and that gold and silver form the sole money, then the 
amount of them so employed [at any given level of prices] 
would seem to be regulated by two circumstances. 

The first of these is the quantity of commodities that may 
exist to be exchanged. This again must depend on the 
quantity of materials wrought up into instruments, and on 
the progress of the division of labor [employments]. As the 
number of instruments increase, and as from their first 
commencing formation, until they are exhausted, they pass 
through more hands, the amount of exchanges must increase. 
As the number of instruments formed decrease, and as every 
man himself constructs a greater proportion of those necessary 
to supply his own wants, the amount of exchanges must 
diminish, and as the amount of exchanges increases, or 
diminishes, so must there be required [at any given level 
of prices] a greater or less quantity of the medium through 
which they are transacted. 

In such a state of things as we suppose, could every 
man see exactly beforehand the whole series of the exchanges 
that would present themselves to him, every prudent man 
would so manage his exchanges, that is his purchases and 
his sales, as to provide himself with the exact amount of 
money necessary to effect every exchange that he might deem 
it advisable to execute. But no man can with accuracy fore- 
see what transactions may present themselves to him, or 
when they may do so. The amount of possible future ex- 
changes that may offer to any man, and the time they may 
occur, are exceedingly uncertain, depending on many things 
not to be foreknown — the operations of other individuals 
engaged in the formation of instruments immediately or 
remotely connected with those on which his means or industry 



118 OF SEPARATION OF EMPLOYMENTS 

is engaged, the course of the winds and seasons, the fortune 
of war, the progress of treaties, and numberless other events 
equally doubtful in their issues. Every man, therefore, would 
in such a state of things, suffer two inconveniences, he would 
occasionally have too much money, and occasionally too little. 
He would sometimes have a sum lying for a long time useless 
by him, and an advantageous purchase would sometimes 
present itself to him which he had not cash sufficient to effect. 
Between these two opposite evils, it would be his business 
to steer as safe a course as possible ; he could not hope 
altogether to avoid them, but must be content to suffer 
occasionally from both. Which of the two it would be 
most prudent for him to run the risk of suffering from, would, 
I conceive, depend on another circumstance, forming the 
second of those that, under the suppositions we have made, 
regulate the amount of precious metals in circulation. 

Every man must be more unwilling to run the risk of 
having a sum of money lying useless by him, by how much 
greater the amount of the returns he could have by turning it 
to the formation of instruments. If then, in the society of 
which any man is a member, instruments are not far removed 
from the first orders of our series, when they soonest double 
the expenditure of their formation, he will rather risk the in- 
convenience of having too little money by him, than the loss 
of having a sum in his coffers long unemployed, which might 
have been converted into instruments yielding large returns. 
But if, in the society of which he is a member, instruments 
are far removed from the first orders of our series, he will be 
disposed to reserve a greater amount in the hopes of making 
more by some advantageous bargain, than he could by expend- 
ing it on the formation of any instrument. We should expect 
then to find, that, in countries where either the principle of 
accumulation is too weak to carry instruments on to the more 
slowly returning orders, or where it has not yet had time to do 
so, money would be scarce, and that, where this principle 
having had time to act, its strength has carried them to the 
farther orders, there money would be plenty. Such will be 
found to be the fact. In China, gold and silver are rarely 
seen, in the interior traffic of the country ; in Holland, they 



AND THE SYSTEM OF EXCHANGE 119 

liave always abounded. In new settlements in America, where 
from the superabundance of materials, instruments are of very 
quickly returning orders, the amount of coin to be found is 
exceedingly small. When a man there has cash in his pocket, 
he finds so many things that he could with profit expend it on, 
that he can scarcely refrain from doing so. 

An European visiting some parts of Upper Canada, is sur- 
prised when he comes to discover, that a few dollars is all the 
cash that even men comparatively rich may have lying by 
them. He is apt to conceive that they are poor men, and to 
describe the country as a poor country. In doing so, how- 
ever, he does not make a correct use of words. He sees, for 
instance, a man who, ten years before, may have brought a 
sum of two hundred pounds to the place where he is now 
settled, without at present twenty dollars in his pocket, and 
who perhaps, were that sum suddenly demanded of him, might 
have difficulty to procure it. In one sense, then, the man is 
poor. But, were this man asked to sell his farm and his 
•other property, he probably would not give it for less than a 
thousand pounds, and he might get this sum for it. If so, it 
is ten to one that he would lay out the greater part of it 
in the purchase of a larger quantity of land than he before 
possessed, and the remainder in improving that land, so that a 
year or two would see him just as bare of cash as before; and 
twelve years afterwards, if he went on prosperously, he would 
still have but a trifle of ready cash, though perhaps he might 
truly consider his property worth two or three thousand 
pounds, and might not be disposed to take less for it. He 
could hardly, therefore, be called a poor man. In this part of 
America, as formerly over the whole of it, " the scarcity of gold 
and silver money is not the effect of the poverty of that 
country, or of the inability of the people there to purchase 
those metals. The scarcity of these metals is the effect of 
choice and not of necessity. It is convenient for the Ameri- 
cans, who can always employ with profit, in the improvement 
of their lands, a greater stock than they can easily get, to save 
as much as possible the expense of so costly an instrument as 
gold and silver ; and rather to employ that part of their 
surplus produce which would be necessary for purchasing those 



120 OF SEPARATION OF EMPLOYMENTS 

metals, in purchasing the instruments of trade, the materials of 
clothing, several parts of household furniture, and the iron 
work necessary for building and extending their settlements, in 
purchasing, not dead stock, but active and productive stock." ^ 

But, though the loss of having more idle cash lying by 
one than can possibly be dispensed with, must be felt most 
sensibly where such cash can be most profitably expended, where 
instruments, that is, are not far from the first orders of our 
series, still it must always be felt. A man will never keep 
two hundred pounds in his chest, if he thinks it probable that 
one hundred will be sufficient, because he can always make 
something of the other hundred. Although however, men, in 
such cases, must be governed by what they think probably 
will happen, yet, as no man can foresee with certainty what 
may happen, every man will now and then be wrong in his 
calculations, and therefore, under the suppositions we have 
made, every man would occasionally suffer from having too 
little cash, as well as at other times from having too much. 

The effect of both these sorts of losses must be, to place 
the instruments on which they operate in orders of slower 
return, than they would otherwise occupy. Que wishes to 
purchase a pair of young horses of a particular sort ; for this 
purpose he reserves a quantity of coin equivalent to four 
hundred days' labor ; he happens, however, not to meet with a 
pair that suits him for the space of six months, when he 
purchases two, giving for them the amount he had anticipated. 
It is evident, in this case, that they have really cost him, not 
only the four hundred days' labor, but all that in the country 
in which he lives, that labor would have produced, besides 
paying for itself, during the six months he was looking out for 
the bargain. Now, as this additional outlay cannot add to the 
capacity of these instruments, to the strength, swiftness, beauty, 
and health, that is, of the animals, nor diminish their age, 
it must be esteemed as lessening the proportion between the 
return to be got from them, and the outlay expended on them, 
and must move them proportionally towards the orders of 
slower return. Again, it may have been that the person who 
at last sold the horses, may have been desirous of selling 
1 Wealth of Nations, Book V. c. III. 



AND THE SYSTEM OF EXCHANGE 121 

them for six months before he effected the sale, and that at the 
commencement of that period he may have met with an indi- 
vidual who would have purchased them, but not having antici- 
pated the occurrence of so favorable an offer, happened not 
then to have the necessary cash. If we suppose them to have 
been merely useless to their owner during the period from 
thence elapsed, the service they rendered him being just 
sufficient to pay for their food and keep, still, this retardation 
in the return from the outlay in the formation of them as an 
instrument, also moves them for him so much towards the 
more slowly returning orders, and diminishes the activity of 
the accumulative principle. If the individual who raised 
them does not receive an additional price, proportionate to 
the delay, the occurrence will have a tendency to make him 
give up this branch of business. 

Similar events taking place in the exchange of other instru- 
ments, would produce similar results, and therefore two evils 
would necessarily accompany the state of affairs we have sup- 
posed. There would be two drawbacks on the progress of the 
industry of the society, the one consisting in the expense of 
the circulating medium, the other in the loss arising from a 
deficiency in it. The two together would be in proportion to 
the amount of exchanges, which the progress of knowledge, the 
strength of the principle of accumulation, and the quality of 
the materials within reach of the society, caused to be trans- 
acted. The evil directly arising from them would be the 
consequent retardation of the returns from the industry of 
the society, an evil equivalent to a proportional diminution of 
these, and placing [the instruments producing] them in more 
slowly returning orders. The evil indirectly arising from 
them would be, the keeping a greater or less extent of 
materials without the reach of the strength of the accumulative 
principle of the society, and the consequent nonformation, to a 
greater or less extent, of instruments that would otherwise 
have been formed. 

The proportion between the two would be determined by 
the order to which the strength of the effective desire of 
accumulation, and the time which it had had to operate, had 
carried the formation of instruments. ^ 



122 OF SEPARATION OF EMPLOYMENTS 

But the state of things we have supposed never exists. It 
scarcely happens, even to return to the sort of transactions we 
set out from, that a butcher, a brewer, a baker, dealing 
together, effect all their business either by direct barter, or 
by cash. The butcher would, in very many cases, be satisfied 
with the implied promise of the brewer and the baker, that, at 
some future time, they will give him a quantity of the com- 
modities they respectively deal in, or of money, or some 
equivalent to it, equal to the price of the beef each received. 

This mode of effecting the object, constitutes the system of 
credit, the second of the two systems by which exchanges are 
carried on. It has an existence in every country, and in most 
civilized countries, as is well known, the great bulk of transac- 
tions are carried on by the aid of it. Were the actual or im- 
plied promise, which the party receiving the commodity makes 
to him giving it, always fulfilled, it would in itself be 
unattended with any loss, and might possibly be so managed as 
almost entirely to supersede the use of coined money as a 
medium of exchange. 

The whole amount of the purchases made by any individual 
within a limited time, is, in general, about equal to the sales 
he effects within the same time. If, therefore, in any commu- 
nity, all the exchanges, which are not direct barter, were to be 
transacted by credit, and were the obligations to pay granted 
by all persons engaged in business in it to expire at the same 
time, when that time came round, every individual would hold 
obligations to receive, to about as large an amount as he 
had granted to pay. If then each individual had granted 
obligations to pay, to the same persons as he had received 
others from, the business would be at once concluded by a 
reciprocal delivery of obligations. But this can scarcely ever 
happen ; almost all the obligations to receive payment, which 
any individual holds, will be from other persons than those to 
whom he himself has granted obligations. The affair might 
however be managed, and the same end arrived at, by a 
transfer of obligations from hand to hand. A has bound him- 
self to pay B fifty pounds, B to pay C fifty pounds, and C to 
pay A fifty pounds. If, then, A pay B, by giving him C's 
obligation, B can discharge his debt to C with it, and thus the 



i 



AND THE SYSTEM OF EXCHANGE 123 

■debts and credits of the whole three be settled. By opera- 
tions more complicated, but conducted on similar principles, 
nearly the whole system of exchanges of any community might 
be managed. 

There are two obstacles to this mode of effecting exchanges 
by credit. The first arising from its inherent complexedness 
and difficulty, the second from the liability of the contracting 
parties to fail in fulfilling their engagements, from dishonesty, 
miscalculation, and accidents impossible to be foreseen. These 
restrict its application in general to transactions for large 
amounts, little doubtful in themselves, and which from their 
nature can be easily systematized and arranged. Such appears 
to have been the vire7nens, or transfers, at Lyons.^ Such also 
•are the transfers effected by the London bankers. In Eussia, 
however, it would seem to be applied to transactions much more 
various, and complicated. Mr. Storch informs us that the 
creditors and debtors of the province of Kief, and several 
others adjoining — the proprietors, capitalists, merchants, those 
who want funds, and those who want to dispose of them, — meet 
in the month of January, in the town of Kief, to make such 
transfers, and that in 1804, the amount of their exchanges 
was upwards of twenty millions of rubles, or about three 
millions seven hundred thousand pounds sterling. Transfers 
similar to these are made, he adds, at Eeval, and many other 
towns in the empire.^ 

There is another method by which the system of credits 
might be conducted, and which may be illustrated by an 
example taken from a country already referred to, where 
the causes exciting to its introduction, and giving preva- 
lence to it, operate very powerfully. In many parts of North 
America, but more especially in new settlements in Upper 
Canada, the scarcity of cash, and perhaps other circumstances, 
often lead traders to adopt a peculiar plan of business. Every 
dealer provides himself with a general assortment of all sorts 
of commodities in demand in the settlement he inhabits, and 
reckons on being paid for them in the shape of grain, potash, 
pork, beef, and other commodities, in the formation of which 

^ Ganilh, Des systtmes d'6conomie politique, Tome II. p. 155. 
^ Storch, Cours d'economie, Tome II. p. 353. 



124 OF SEPARATION OF EMPLOYMENTS 

his customers are engaged. But in this sort of barter, one 
article will generally fall short or exceed the value of the 
other, a pound of tea will not exchange for a hog, nor a 
quarter of wheat for a dozen pounds of sugar. To obviate the 
difficulty, the merchant opens an account with each of his 
customers, charging him with the goods furnished, and giving 
him credit for [crediting him with] the produce received, and 
in this way perhaps all the transactions between the two are 
managed, either by barter or credit, without the assistance of a 
dollar of cash. Nor is this all ; a great variety of other trans- 
actions are also effected through his intervention. Any person 
who may have furnished him with an overplus of produce, or 
who has credit with him, can through his means settle most 
accounts or balances due on accounts. He may thus pay the 
laborers, and the artificers, and tradesmen, he may employ, by 
an order on the shop, or as it is called, store, of the country 
dealer. Besides these, the transactions of the storekeeper 
extend to the giving out of the raw produce of the country to 
individuals in the settlement, tradesmen, etc., who may not 
themselves have enough, and to the receipt in return of 
various articles, such as axes, shoes, boots, made-up clothes ; 
and in this way through his books, a very large portion of the 
business of the settlement is transacted. It is not difficult ta 
conceive, that the whole might be so transacted. 

Were the country dealer always to have a supply of every 
article in demand in the settlement, at a reasonable rate, and 
were all contracts for the delivery of produce to him to be 
regularly executed, almost all the requisite exchanges might be 
conveniently eftected through his books. But in this sort of 
traffic, as the merchant always has commodities to sell, and his 
customers have not always produce to return, it inevitably 
happens that they get into his debt. As his object is to sell 
as many goods as possible, he is very apt to allow many 
to run in his debt, who do not fulfil their engagements. He 
suffers from the dishonesty, or the imprudence and miscalcula- 
tions of those who deal with him. Very many of his 
customers are much longer of paying him than they have 
promised, or they do not pay at all. Aware of the risk 
he runs, he is obliged to balance it by charging an additional 



I 



AND THE SYSTEM OF EXCHANGE 125 

sum, over and above what he would otherwise demand, on 
all commodities that pass through his hands. In some cases, 
this advance amounts to at least 30 per cent. In this way he 
makes, or endeavors to make, the prudent and honest persons 
who deal with him, pay for the imprudent and dishonest, who 
also deal with him. The former class, in consequence, keep 
out of the circle of all such transactions, as much as possible, 
and store-pay, as it is called, is depreciated.^ 

Gold and silver would thus seem to have been considered, 
first, simply as themselves the most precious, and easily pre- 
served of all articles ; next, their capacity for being divided 
and re-united without injury, would seem to have led to their 
general employment in exchange for other things the acquisition 
■of which their possessors found useful or necessary ; ^ con- 
venience then to have rendered it expedient to have them 
formed into pieces of a certain weight and fineness, when they 
began to constitute what is now called money ; lastly, their 
general adoption as money would seem naturally to have 
rendered them proper measures to give fixedness to those 
obligations to future delivery of things in exchange, which the 
increased security and tranquillity of modern times, and the 
great amount of exchanges transacted, have in recent days 
introduced. In the two latter employments, as serving for 
real, or determining the rights which the possession of fictitious 
money conveys, they occasionally serve as media for exchanging 
all instruments, and, therefore, for determining and expressing 
their relation to each other, as things capable of being 
exchanged. In this way measuring all things exchanged, or 
capable of being exchanged, that is, all instruments, they come 
to denote the amount of instruments, or capital, or stock, which 
any man possesses. A person is said to be worth five 
hundred, or five thousand pounds, as he has instruments 
which, in exchange, would be measured by these sums re- 
spectively ; and, as in common life all things are considered, 

1 [The omission at this point constitutes Part I. of the Article on Banking in 
the Appendix.] 

2 Thus the Knight parted with a link or two of his gold chain, when in need, 
and in more ancient times the traveller carried his bag of gold dust. 



126 OF SEPARATION OF EMPLOYMENTS 

not as they are, but merely in their actions and relations, 
instruments come there, also, to be spoken about, and coq- 
ceived of, altogether in the relation they have to certain pieces 
of gold and silver/ 

These are not the only effects which the exchange of instru- 
ments for one another, and the consequent use of money as the 
medium of exchange, have produced in our conceptions of 
them. The system of exchanges, being attended by that of 
credit, implies the existence of some mode of ascertaining the 
amount to be rendered back, for instruments received in trust. 
It is sufficiently obvious that this must be determined by the 
order to which the principle of accumulation, and the time it 
has had to operate, has carried the formation of instruments in 
the society. If, in any society, instruments are at the order D, 
doubling in four years, then one receiving an instrument on 
trust, for four years, will, at the end of that period, have to 
return two of the same sort and quality. If they are at the 
order E, he will have to return two at the end of five years, 
etc. Thus it is a common practice in many parts of North 
America, especially in new settlements, to sell cattle and sheep 
on trust, the terms being that double the number thus trans- 
ferred is to be returned in four or five years, as the agreement 
may be made. More generally, however, much shorter periods 
are adopted, for the settlement of accounts. The natural 
periods of a year, and a month, have in different times and 
places, been made choice of for this purpose. It is then 
necessary to calculate what is due by the one party to the 
other at these periods, and these calculations are naturally 
made in money. 

Instead, for instance, of returning two cows at the end of 
five years, the bargain may be, that a proportional sum is to be 
paid at the end of the first, second, third, fourth, and fifth 
years. Were money paid for the cow immediately, the amount 
we shall say would be twenty dollars, the double of that, 
which would be the sum to be given were the time of payment 
deferred till the expiration of five years, is forty dollars. The 
annual payment can neither be a fifth part of the one sum, 

^ [That is to say, in Rae's peculiar terminology, we consider in common life- 
only "relative stock " and disregard "absolute stock."] 



AND THE SYSTEM OF EXCHANGE 



127 



four dollars, nor of the other, eight dollars, but one between the 
two, in this case about six dollars. Again, the bargain may- 
be, that a cow be returned at the expiration of the fifth year,, 
and that, for her use during that time, an annual remuneration 
be made ; this would be a half of the former annual payment^ 
nearly three dollars, and that sum accordingly, when such an 
arrangement takes place, is the usual yearly payment for what 
is called the rent of the cow. Whatever order instruments 
may be at, some similar calculation might determine, what 
should be the proportion annually paid for the lise of any of 
them. The employment of money in these calculations has 
simplified them, by the introduction of general rules. The 
return which instruments make, is estimated at so much in the 
hundred, or per cent, that is, in the hundred pounds, dollars, or 
whatever may be the current coin. Eeducing our orders to 
this phraseology, they would be respectively : — 



A 100 


per cent. 


per ann. 


H 9 per c€ 


B 41 


J) 


i) 


I 8 


C 26 


jj 


)) 


J 7 


D 19 


J! 


,, 


K 6-5 


E 15 


„ 




L 5-9 


F 12 


!) 


„ 


M 5-5 


GIO 


,, 


„ 


N 5 



etc. 

It is on these principles, that all reckonings are made, not 
only of instruments given on credit, but of those retained. In 
the latter case, the annual return is termed profits of stock, in 
the former interest. There is, however, this difference between 
the two, that, in the profits of stock, is generally included the 
return that has to be made, for the mental exertion and 
anxiety, and bodily fatigue, of the owner of the stock. There 
is, also, a difference between them, in common language, arising 
from its being the practice to speak of the more favorable 
issues of instruments, as determining the rate, without reckon- 
ing those that have turned out less favorably, or unfortunately. 
Thus Adam Smith : " In a country where the ordinary rate of 
clear profit is eight or ten per cent, it may be reasonable that 
one half of it should go to interest, wherever business is carried 
on with borrowed money. The stock is at the risk of the 



128 OF SEPARATION OF EMPLOYMENTS 

borrower, who, as it were, insures it to the lender ; and four or 
live per cent, may, in the greater part of trades, be both a 
sufficient profit upon the risk of this insurance, and a sufficient 
recompense for the trouble of employing the stock." ^ Here, 
ordinary profit evidently means, not the average profit, but the 
profit of favorable years. The average profit of a merchant, 
for example, is not properly the profit he makes upon his 
more favorable adventures, but what he makes on all those 
adventures that yield a profit, whether great or small, after 
deducting the actual loss he may sustain on others. The 
average profits of all the merchants of any country, also, 
include their very favorable, their less favorable, and their 
losing adventures. In this way, using the term profit for the 
return made from the outlay expended on the formation of the 
whole instruments spoken of, actual losses are also included in 
it, and, in speaking prospectively of future profit, the risk of 
future loss is included, and what Adam Smith calls the risk of 
insurance disappears. If in a country where the average profit 
is, in reality, only eight per cent., a particular merchant con- 
tinue for some years to make ten per cent., he may indeed 
expect, and is perhaps apt to expect, the same return in future 
years ; but, unless in so far as he can truly calculate on 
his mercantile sagacity and activity being above par, in 
so doing, he acts imprudently, and the chances are that he 
is undeceived by having to sustain actual losses in succeeding 
years. 

We may then assume the rate of interest as a fair measure 
of the real average rate of profits in any country, and conse- 
quently of the order in our series, at which instruments are 
there arrived. So receiving it, we shall find that it agrees very 
closely with the preceding observations. 

In China, we are told by Barrow, that the legal rate of 
interest is twelve per cent., but that, in reality, it varies from 
eighteen to thirty-six. The remarks of other authors agree 
pretty accurately with this statement, fixing the orders at C or 
D. The Dutch seem, of all European nations, hitherto to have 
been inclined to carry instruments to the most slowly returning 
orders. The durability given to all the instruments constructed 
^ Wealth of Nations, Book I. c. III. 



AND THE SYSTEM OF EXCHANGE 129 

by them, the care with which they are finished, and the atten- 
tion paid to preserving and repairing them, have been often 
noticed by travellers. In the days when their industry and 
frugality were most remarkable, interest was very low, govern- 
ment borrowing at two per cent, and private people at three. 
The former indicated an order doubling in about thirty-three 
years, the latter, one doubling in twenty-three years. In 
ancient Eome, interest was in reality exceedingly high, from 
twelve to fifty per cent.^ Were we farther to compare the 
orders in which instruments appear to stand in other countries, 
with the rate of interest in those countries, we should find the 
two everywhere correspondent. I apprehend, however, that 
this is needless, for, as the reader must on consideration per- 
ceive, it is impossible it can be otherwise. Loans, indeed, pass 
under the name of money, but money is only the means of 
effecting the loan, it is in reality instruments that are lent, and 
they must in return yield not much less [somewhat more] than 
what is paid for their use, otherwise they would not be bor- 
rowed, and [but] not much more, otherwise they would not be 
lent. 

The system of calculation, the foundation of which we have 
been considering as connected with exchanges, is convenient 
for all engaged in the business of transfers, and answers their 
purposes very perfectly. When applied,- however, to specula- 
tive purposes, it labors under the disadvantage to which all 
practical general rules are liable, when assumed as sioecidative 
general principles. According to it, stock is regarded alto- 
gether as measured by money, and an amount of stock is 
considered, simply, as an amount of money, or something that 
will bring money. The stocks, therefore, of different countries, 
are viewed as differing merely in amount, and every increase 
and diminution of the stock of the same country, as a simple 
addition, or subtraction, of an homogeneous quantity. These 
events being so viewed, have been assumed so to exist, and the 
general increase and diminution of stock have been treated of, 
as things as simple in their nature, as the rows of digits 
employed to mark the amount of money by which they are 

^ Histoire de Vusure, par Boucher, Paris, 1819, p. 25. The laws against 
usury, there, as elsewhere, increased, instead of diminishing the evil. 

I 



130 OF SEPARATION OF EMPLOYMENTS 

estimated. Some of the fallacies hence arising, will be pre- 
sently noted ; they will, I believe, be found to be the foundation 
of much of the contradictions, in which the reasonings on these 
subjects are involved. 

[With respect to the particular subject touched upon in this last paragraph, 
see the Article on Method in the Appendix, the passage beginning : "Thus, 
if in any particular society, we were to be asked, what the capital of some 
other person were," etc. At the risk of anticipating somewhat, a passage 
from Chapter I. Book I. of the original is introduced here. ] 

The observation of Bacon is now trite, that men believe 
that the words they employ in the process of reasoning, serve 
the intellect as mere passive instruments, but that, in reality, 
they have often an active reflex power, through which, while 
the mind deems it governs them, they are enabled to usurp 
the command of it, and so misdirect its course. 

Our author [Adam Smith] notices the errors, which, in this 
way, have arisen from the use of the term money. 

" Money, in common language, as I have already observed, 
frequently signifies wealth ; and this ambiguity of expression 
has rendered this popular notion so familiar to us, that even 
they who are convinced of its absurdity, are very apt to forget 
their own principles, and, in the course of their reasonings, to 
take it for granted as a certain and undeniable truth. Some 
of the best English writers upon commerce set out with 
observing, that the wealth of a country consists, not in its 
gold and silver only, but in its lands, houses, and consumable 
goods of all different kinds. In the course of their reason- 
ings, however, the lands, houses, and consumable goods, seem 
to slip out of their memory ; and the strain of their argument 
frequently supposes that all wealth consists in gold and silver, 
and that to multiply those metals, is the great object of 
national industry and commerce." ^ 

It is remarkable that, in the use of the term capital, he 
himself leads his readers into a somewhat similar error. 
Capital means in common language a sum of money, or 
something for which a sum of money can be got ; and, as 

1 Wealth of Nations, B. IV. c. I. [See " Note D " in the Appendix.] 



I 



AND THE SYSTEM OF EXCHANGE 131 

the increase both of national and individual capital produces 
a sum of money, or something for which a sum of money 
can be got, the similar estimation of both by a row of figures 
is the thing that in this way naturally comes uppermost to 
the mind, and hence, the things themselves in both cases 
forming the increase not being immediately present to its 
thoughts, it heedlessly falls into the conclusion that they 
also are perfectly similar. In comparing, indeed, the national 
capital as it has existed at distant periods, the small national 
capital of remote periods with the large national capital of 
the present, we immediately perceive, that not only the sum 
at which the national wealth was formerly rated is increased, 
but that the things which constituted it are changed. The 
wealth of England is certainly ten times now what it was in 
the reign of Henry the VIII. ; we do not conceive, however, 
that it is formed by multiplying tenfold such articles as con- 
stituted the sole riches of its inhabitants in that somewhat 
rude and barbarous age. We perceive here, that there is 
and must be, not only an increase but a change. When, 
however, we come to consider the smaller parts of which this 
increase is gradually made up, as the change here is not 
perhaps perceptible (and as all we see is the sum produced 
by it, the fact of the increase being more easily ascertained 
than the manner of it), the similarity of the terms naturally 
inclines us to conceive that it resembles the increase of 
individual capital, and consists of a mere increase of things, 
not of a change also in them. 



CHAPTER IX. 

OF INVENTION CONSIDERED AS A GENERAL 
SOCIOLOGICAL PRINCIPLE. 

Invention is the most important of the secondary agents, to 
the influence of which man is subject. To us, it is the great 
immediate maker of almost all that is the subject of our 
thoughts, or ministers to our enjoyments, or necessities; nor is 
there any portion of our existence, which is not indebted to 
its antecedent forming power. Wherever it really is, it is 
recognised as one and the same, by this its formative capacity. 
It is always a maker, and, in a double sense, a maker. From 
the depths of the infinity lying within and without us, it 
brings visibly before us forms previously hidden. These are 
its first works. But neither does it intend to stop, nor does 
it, in fact, stop here. The forms which its eye thus catches, 
and its skill " bodies forth " into material shape, pass not 
away ; they remain. Things of power, true workers, drawing 
to themselves, and fashioning to their semblance, the change- 
able and fleeting crowd that time hurries down its stream, 
they are, in truth, the only permanent dwellers in the world, 
and rulers of it. In this the double power of his works, the 
mathematician is as much a maker as the poet, and the poet 
as the mathematician ; and genius in all its manifestations, 
may, in so far, be considered as the same power, and as excited 
to action by similar causes. 

Our subject leads us to attend to invention, merely as it 
concerns itself with the material world. But, as the motives 
exciting the men in whom it is exhibited to give themselves 



INVENTION SOCIOLOGICAL 133 

up to its requirements, must be held among the chief of the 
causes of its manifestation, and as they who in this depart- 
ment have been most extensively inventors, have in general 
communicated little of the principles that animated and sus- 
tained them in their career, science and art being silent of 
themselves, we may be allowed to give wider compass to our 
view, and to cite, when our purpose requires it, those who 
have been real discoverers in any of the various regions over 
which the power of this principle extends. 

The motives, exciting to this sphere of action, are not very 
apparent. 

Man is essentially imitative ; his instincts impel him to 
amalgamate with the mass. From the first moment of his 
existence, his faculties are on the stretch, drinking greedily in 
surrounding gestures, feelings, principles and modes of action, 
which he again communicates ; he seems by turns a recipient 
of existing impressions, and a transmitter of them to others. 
Nor, unless he look far beyond himself, is there any evident 
motive for his endeavoring to extricate himself from the ever- 
whirling circle of which he forms a part. Hundreds of 
millions have preceded him ; to learn and practise what they 
have left, is the direct road to his goods, pleasure, and honor. 
Why then should the individual waste the sweets of momentary 
existence, in rashly and needlessly tasking his feeble powers 
to form a new path, when one already exists, along which so 
many have trodden, and which their footsteps have beaten 
smooth ? One of the Jesuits having been asked, why the 
Chinese had made no progress in astronomy beyond the rude 
elements of the science that they had possessed from a very 
remote antiquity, answers, from the indolence, and want of 
application to these pursuits, of the men of succeeding ages, 
and from their preferring, like those of the present day, what 
they have esteemed their immediate and substantial interests, 
to the vain and barren reputation of having discovered some- 
thing new. The reason, which the father Parennin assigns for 
the stationary state of their astronomy, may be transferred to 
all their other sciences, arts, and pursuits, which fifty genera- 
tions have contented themselves with learning, practising, and 
teaching, as they received them from men of times more 



134. INVENTION SOCIOLOGICAL 

distant. A well weighed attention to what is for their present, 
and, as they say, substantial interests, has led them to do this, 
and forbid them to do more. 

In that Empire, the door to wealth and honor is not abso- 
lutely barred to any one, and in this it would seem superior to 
other lands, that there, whoever possesses learning has a key 
that will infallibly open it. Let him who would raise himself 
superior to his fellows, give his youth to study, let him care- 
fully make his own a due portion of the knowledge, the wit, 
the eloquence, or what passes for them, stored in the volumes 
his masters put in his hands. These acquirements will be the 
passports to the places round which riches and distinctions 
cluster. Making use of them industriously, prudently, perse- 
veringly, he may certainly attain the rank of a skilful 
physician, a learned jurist, a practised and ready speaker, or, 
perhaps, a man versed in the constitution and policy of the 
empire, fit to take on him the office of a statesman, and share 
its rewards and honors. He may be attended by obsequious 
crowds ready to flatter his vanity, minister to his pleasures, 
conceal his weaknesses ; alive he may be honored, dead 
lamented, — why then abandon these sure and substantial 
advantages, to pursue what there is but a chance of gaining, 
and which, even if at length attained, is but empty fame, — a 
breath, — the filling at the best, 

" A certain portion of uncertain paper." 

The practical wisdom of the Chinese answers at once, it 
were folly. 

Is that which is sound, practical wisdom among those 
Asiatics, the reverse of it among us Europeans ? The reader 
may determine, by casting his eyes about him, to discover who 
are the men, who have been most successful in attaining 
wealth, comfort, respectability ; in avoiding dependence, mis- 
fortune, calumny. Whoever, or wherever, he may be, certainly 
he will not find it is they who have sought to be, or have 
really been, men of genius. 

We in vain search for any sufficient motive exciting 
to this course of action, unless the good arising from com- 
municating good, and the consequent desire to be a benefactor 



INVENTION SOCIOLOGICAL 135 

in the most extended possible manner.-"^ This desire is the 
proper aliment of genius. " Leave me not," the lay [has] it, 

" In its loneliness, 



Its own still world, amid th' o'er peopled world, 
Hath ever breathed to love." 

When very strongly felt, it irresistibly impels those veho are 
conscious of capacities equal to the attempt, spite of every 
obstacle to be overcome, or pain to be endured, to task them- 
selves to the performance of works of permanent and diffusive 
utility. To reflective minds, and large and generous natures, 
the creations of genius must present themselves as of all works, 
those most extensively conferring enjoyment and power,^ and 
their successful execution as of every enterprise the noblest ; 
nor need we wonder that to such it should have a voice of 
magical, and almost resistless attraction. 

When the peasant poet of Scotland seeks to recall an 
image of his earliest self, he finds there uppermost this master 
passion, this " boundless love " of his fellows and his native 
land, urging him to make it appear by something worthy of it, 
and marking its strength. This was the wish, 

" Ev'n then a wish (I mind its power,) 
A wish that, to my latest hour, 
Shall strongly heave my breast," 

that led him to the realms of song. This was in truth the 

genius, 

" Sua cuique deus fit dira cupido," 

who " threw her inspiring mantle over him," and awakening 
powers else torpid, enabled him to draw from out the vulgarity 
before hiding them, images not idly falling, and to fall, on 
many a heart : patriotism ardent and self-devoting ; passion 

^ This is to be received as concerns our existence, limited to the earth and 
to time, the only light in which it can with propriety be considered in these 
speciilations. Were we to view it as belonging to the universe and to eternity, 
action directed to the purposes referred to, wotild not be impeded from the 
considerations thus presented, but would, on the contrary, derive from them 
ireedom and energy. 

^ Videtur inventorum nobilium introductio inter actiones humanas longe 
primas partes tenere. Lobd Bacon. 



136 INVENTION SOCIOLOGICAL 

manly yet tender ; love without the coarseness of the one class 
of society, or the affectation or epicurism of the other. 

Who can estimate all the effects of these hasty fragments of 
the poet's art ? If we consider the subject well, and weigh it 
fairly, we shall confess, that their author has exercised an 
influence already greater, and far more abiding than any of the 
men of his country and age. It is thus that genius manifests 
the potency of the principle that inspires it, and that the 
simplest lays of the simplest bard, may have a power passing 
far, that of the triumphs of the statesman, or the warrior. 
The one wakens energy, otherwise dead, into action, the other 
merely directs that action. 

" But," it may be said, and not without a show of reason, 
" why, if genius is roused and moved by principles so pure, 
does it happen, that the undoubted possessors of it, are them- 
selves so often defaced by faults, and that we speak of them, 
and their aberrations, as if naturally conjoined ? Ambition, 
the desire of excelling, a much more questionable motive, 
would rather seem its proper stimulant." 

As we are not attempting to investigate the governing 
principles of classes [or individuals], but of societies, it were, 
perhaps, enough in answer to observe, that the existence of 
genius among a people, implies at least the diffusion of a 
tincture of generous feelings, somewhere throughout the mass. 
If we were to see an individual periling his own life to rescue 
another from impending danger, it might be doubtful to us 
whether the action proceeded from a desire of saving the 
person in danger, or of the applause and praises following the 
doing of it ; but that applause, and those praises, would them- 
selves evince a general perception of the moral worth of such 
an action, supposing it to proceed from the purest motives, 
and correspondent sympathy in the pleasure likely to be 
experienced from it. Vanity could receive no gratification 
from a deed of this sort, where the spectators only regarded it 
as an incomprehensible piece of rashness. In like manner, 
though it seem to us, that many who have eminently succeeded 
in the pursuits of which we speak, have been actuated merely 
by the desire of gratifying a selfish vanity, still, that the 
attainment of these objects should be followed by the warm 



INVENTION SOCIOLOGICAL 137 

and sincere applause, that alone constitutes genuine fame, is a 
proof at least, of the existence somewhere, of a due apprecia- 
tion of the motives from which these pursuits are supposed to 
proceed, and of sympathy with the pure gratifications their 
success is presumed to yield. But it enters into my design to 
show, that, without supposing the two classes actuated by 
different principles, there are sufficient causes for those wander- 
ings, as they are called, of genius from the common path, for 
that contrariety of course, [and for] that seldom intermitting 
opposition and strife, which have almost everywhere been 
maintained, between the society in which they existed, and the 
individuals, who have been ultimately the great instruments of 
ameliorating and elevating its condition. Such an exposition, 
removing part of the obstructions to our view, will make it 
appear, that it is not so much from the diversity of the 
moving powers, as from the imperfections of the bodies im- 
pelled, that this jarring and contrariety of action arises. 

It is necessary to premise, that for the present purpose, two 
classes occasionally confounded together, must be kept apart. 
Eeal inventors, the men whom we have alone to consider, 
differ from mere transmitters of things already known. The 
latter are an acknowledged, and very useful class, in all 
societies, but they neither encounter similar difficulties, nor 
produce similar effects to the former. They neither oppose, 
nor direct the current. 

In the gradual progress of things, the media for communi- 
cating ideas have been changed ; types have come to do, in a 
great measure, the office of the voice. What in ages past 
would have formed a discourse, or harangue, is now a book, or 
part of a book. Among the many vast consequences of the 
revolution, we overlook the small one of its occasioning the 
classing under one name, of those who are enlargers of the 
stock of knowledge, and those who are merely efficient com- 
municators of portions of it. They are all successful authors, 
authors, that is, of books which are read. Just so, the bard or 
bards of the elder ages of ancient Greece, who first embodied 
in song the deeds of the besiegers of Troy, and they who, in 
after times, repeated the verses they had learned, were all 
chanters of heroic lays. Many, too, of the latter may have been 



138 INVENTION SOCIOLOGICAL 

more successful chanters than the former, for they sang to ears 
prepared ; but there was between them, notwithstanding, an 
essential difference. There is also a line distinguishing the 
mere framers of books, from the original makers of their 
materials ; it may not be very easily drawn indeed ; but this 
is unnecessary for our purpose, it is sufficient to have pointed 
out its existence. It may be observed, too, that as of bards, 
so of authors, they who are mere compilers and repeaters, may 
be more successful than they who are real inventors, they may 
better suit their productions to particular times, tastes, and 
exigencies, and, besides, they can always find an audience 
prepared, by previous training, to applaud. 

The tendency of these pursuits is to withdraw those occu- 
pied in them from the daily business of society. They fill 
not the places open for them, and which they are expected to 
fill ; even when necessity pushes them for a time into them, 
and compels them to mingle with the crowd, they are marked 
as not belonging to it. Abstract and scientific truth can only 
be discovered by deep and absorbing meditation ; imperfectly 
at first discerned, through the medium of its dull capacities, 
the intellect slowly, and cautiously, not without much of 
doubt, and many unsuccessful essays, succeeds in lifting the 
veil that hides it. The procedure is altogether unlike the 
prompt determination, and ready confidence, of the man of 
action, and generally unfits, to a greater or less degree, for 
performing well the part. He, again, who dwells in the world 
of possible moral beauty and perfection, moves awkwardly, 
rashly, and painfully, through this of everyday life, he is ever 
mistaking his own way, and jostling others in theirs. To the 
possessors of fortune, these habits only give eccentricity ; they 
affect those of scanty fortune, or without fortune, with more 
serious ills. Unable to fight their way ably, cautiously, and 
perseveringly through the bustle of life, poverty, dependence, 
and all their attendant evils, are most commonly their lot. J 

" Toil, envy, want, the patron, and the jail," 

are calamities, from the actual endurance of some of which, or 
the dread of it, they are seldom free. These, however, they 
share with other men ; there are some peculiarly their own. 



INVENTION SOCIOLOGICAL 139 

Pursuing objects not to be perceived by others, or if 
perceived, whose importance is beyond the reach of their 
conceptions, the motives of their conduct are necessarily mis- 
apprehended. They are esteemed either idlers, culpably negli- 
gent in turning to account the talents they have got, dullards 
deficient in the common parts necessary to discharge the 
common offices of life, or madmen unfit to be trusted with 
their performance ; shut out from the esteem or fellowship of 
those whose regard they might prize, they are brought into 
contact with those with whom they can have nothing in 
common, knaves who laugh at them as their prey, fools who 
pity them as their fellows. Their characters misunderstood, 
debarred from all sympathy, uncheered by any approbation, 
the " eternal war " they have to wage with fortune, is doubly 
trying, because they are aware, that, if they succumb, they 
will be borne off the field, not only unknown, but miscon- 
ceived. To have merely to pass without his fame, the poet 
paints as a fate capable of adding double gloom to the shades 

below, 

" Sed frons laeta parum, et dejecto lumina vultu, 

Nox atra caput tristi circumvolat umbra." 

What must it be to those, then, who feel that, ere final 
oblivion hides them, calumny must for a time prolong the 
memory of their existence ? 

Imperfect man is ever prompt, without any consideration of 
the motives of the agents, to conceive of the evils he endures 
as of wrongs received, and to be avenged, on the doers of 
them. We need not wonder, then, that the manifold sufferings 
of genius should sometimes place it in opposition to humanity 
itself, and that, in the inconsistency and recklessness of 
passion, it should turn in anger and in scorn, as its bitterest 
enemy, on that of which it is, in heart, the truest lover. 

These are circumstances, largely affecting the possessors of 
this faculty, even before they have succeeded in making it 
manifest, before they have been able to give outward shape to 
their inward conceptions. There are others, operating simi- 
larly, after they have succeeded in producing them. What is 
really new, has to encounter obstacles of two sorts. It is the 



140 INVENTION SOCIOLOGICAL 

nature of men to be copiers, and, with exceedingly few excep- 
tions, they are nothing more. Mere followers they are of 
rules, walkers in well-beaten paths. Whatever, therefore, is 
in any degree really new, being probably beyond these rules, is 
also beyond their judgment. Nor is this the worst; it is also 
very frequently in opposition to it ; it disagreeably disturbs 
and jars the existing systems, by which men guide their feel- 
ings and reasonings. Hence the works of almost all men of 
really inventive powers, have, at first, been either slighted 
or decried. Cervantes, one of the most powerful and original 
geniuses of modern times, and who ultimately operated as 
largely on affairs as any man whom they have witnessed, was 
placed by his contemporaries far below the subservient taste of 
Lope de Vego, and, in his last days, had to turn from Don 
Quixote to a theme correspondent to the bombast of his age.^ 
It is needless to multiply examples, — in a similar walk Tasso, 
and Shakspeare ; in another, Hume and Montesquieu ; in 
another, Bacon and Galileo, experienced at first either com- 
parative neglect, or partial, or general opposition. Few names 
that now pass current, but rose with difficulty, and were nearly 
again submerged in their earlier progress, by the shock of 
opposing prejudices. 

The practice of printing, has gradually, as it has extended 
the circle of readers, produced effects on the productions of 
genius, not here to be passed unnoticed. The author looks to 
what he calls the public, to those, that is, who read — or rather 
to his own talents for producing works that will find readers — 
for the pecuniary rewards of his productions. This circum- 
stance has had much effect, both in turning the powers of men 
of talents to subjects that may generally interest, and in oblig- 
ing them to treat them in a manner, suited to the tastes and 
notions of the crowd. 

Odi profanuni vulgus et arceo, ^ 

is a sentiment that they neither avouch, nor act upon. That 

1 We cannot read the romance of Peresiles and Sigesmundi, published after 
his death; it had more success than any of his works. "Jamais cet homme 
celebre," says one of his biographers, "ne fut a sa veiitable place : on dedaigna 
ses talens, on meconnut ses vertus, on fut insensible a sa misere." 



INVENTION SOCIOLOGICAL 141 

their work may be popular, men of the highest original genius 
bring it out cautiously, and in a diffused form. Their experi- 
ments are timid. Being, in their way, manufacturers, they 
cannot afford to make such as might deteriorate the value 
of their goods. They must not venture on a dish altogether 
new, they confine their powers to the discovery of something 
that may give piquancy to the old. If the practice be not 
prejudicial to the progress of invention itself, it is fatal to the 
lasting fame of the inventors. The mass keeps swelling, from 
generation to generation, but how, cannot well be noted. This 
result has, however, little to do with our subject ; there is 
another which has much. 

It being conceived to be within the compass of talent, 
to procure, in this way, its own reward, genius of the highest 
order, if its productions are not of a sort to bring a price from 
a bookseller, receives now less recompense than even in ages 
not so able [generally] to appreciate the benefits conferred by 
it; and, from the same causes, the propensity to neglect it 
is greatest where the reading public is the most numerous. 
The promoters of the abstract sciences, and the arts, are no 
where less efficiently aided, than in Great Britain. There, the 
observations of Lord Bacon apply nearly as forcibly as ever. 
" It is enough to restrain the increase of science, that energy 
and industry so bestowed, want recompense. The ability to 
cultivate science, and to reward it, lies not in the same hands. 
Science is advanced by men of great genius alone, while it can 
only be rewarded by the crowd, or by men high in fortune or 
authority, who have very rarely themselves any pretensions to 
it. Besides, success in these pursuits is not only unattended 
by reward or favor, but is destitute of popular praise. They 
are, for the most part, above the conceptions of the common- 
alty, and are easily overthrown, and swept away, by the wind 
of popular opinion.^ 

1 " Satis est ad cohebendum augmentum scientiarum, quod hujusmodi co- 
natus et industrise prsemiis careant. Non enim penes eosdem est cultura scien- 
tiarum, et praemium. Scientiarum enim augmenta a magnis utique ingeniis 
proveniunt ; et pretia et prEemia scientiarum sunt penes vulgus aut principes 
viros, qui (nisi raro admodum) vix mediocriter docti sunt. Quinetiam hu- 
jusmodi progressuB, non solum prsemiis et beneficentia hominum, verum 



U2 INVENTION SOCIOLOGICAL 

Without speaking of the sciences, and, in the arts, confining 
our attention to those exertions of the inventive faculty the 
benefits of which, obstructed by no unforeseen obstacle, have 
been very largely felt, how many, even of the most successful 
of these, have been adequately rewarded ? How many of them 
have left their authors in poverty, or brought them to it ! The 
personal history of most men, who, in modern times, have 
brought into being those arts by which human power has been 
so largely advanced, is little else than a narration of misfor- 
tunes, and ingratitude. 

Nor are the sweets of success itself, in any department 
of invention, even if tasted, uncontaminated by much of bitter- 
ness. It is chiefly felt at the time, as superiority, on which 
wait envy and flattery. Malice, and insincerity, the great 
separators of man from man, and poisoners of the pleasures of 
existence, follow close after. He who gains it, attains an eleva- 
tion commanding, but joyless, and unsafe. 

"Tliough liigli above tlie suu of gloiy glow, 
And far beneath the earth and ocean spread, 
'Round him are icy rocks, and loudly blow, 
Contending tempests on his naked head, 
And thus reward the toils, wliich to those summits led." ' 

It is death alone that can give him the full sympathies 
of his fellows. When the earth wraps her noblest, none any 
longer envy him ; all lament the benefactor, no one sees 
the rival or the master. 

These are circumstances disturbing the course of genius, 
coming mainly from misapprehensions from without ; there are 
others flowing from weaknesses, and imperfections, within. 

There are, in every society, rules of conduct, and practices of 
life, which the progress of events has gradually marked out, 
and general observance hallowed. Of these, some are founded 
on the principles of morality and religion, some on caprice, 
some on prejudice. The breaking of any of them is always 

etiam ipsa popular! laude destituti sunt. Sunt eniui illi supra captum maximae 
partis hominum, et ab opinionurn vulgarium ventis facile obruuntur et extin- 
guuntur." « 



Childe Harold. 



i 



INVENTION SOCIOLOGICAL 143 

esteemed a crime against society, and in reality is so ; the ob- 
servance of them constitutes a character, in public estimation, 
perfect. The mere man of society, that is, the man of merely 
imitative action, learns them uninquiringly, and diligently r 
they make up indeed, almost all he knows, and all the interests 
of himself and family requires he should know, of right and 
wrong. If he transgress them, it is secretly and cautiously. 
He makes amends by unscrupulously and unsparingly gratify- 
ing, whatever is not forbid by the letter of his code, or by his 
own convenience. The inquirer into principles, again, takes a 
wider range, it is not the morality or religion of Italy, of France,, 
of Britain, of North America, after which he seeks, but religion 
and morality in general. He attempts to learn, not what is 
delivered, but what is. The consequence is, that, while the 
mere man of the world is never at a loss, but proceeds securely 
in the direct path to general approbation, the man of specula- 
tion very frequently wanders from it. To say nevertheless, 
either that he knows not what is good or fit, or that he is not 
desirous of observing it were untrue. The eye of the rider 
glances over hill and dale, marks the streams, the woods, the 
hamlets that diversify the prospect, and the whole configura- 
tion of the country he traverses, and so he knows the road. 
The animal he rides knows it too ; he knows it as giving exer- 
cise to his limbs, and bringing him by every step he makes,, 
forward, or right, or left, nearer to some stable-door. Ten to 
one that, practically, the latter has a more accurate knowledge 
of it than the former, and that, while the irrational shall saga- 
ciously and unhesitatingly follow it out, without missing a 
single turning, or making one blunder, the rational, especially if 
the fancy take him to preserve something of a straight line, 
shall have to pass from track to track, to leap many a hedge 
and many a ditch, and having been obliged after all to make 
detours in abundance, come out at last weary, jaded, and 
bemired. 

The ills which men of genius thus occasion and endure, 
from seeking for their rules of action, altogether in the 
relations which they perceive they have to the general system 
of human society, without sufficiently regarding those which 
necessarily connect them to the little system of some particular 



144 INVENTION SOCIOLOGICAL 

society, are merely errors in the actual course pursued, not in 
the motives from which that course was adopted. There are 
others more fatal, coming, not from mistakes in action, but 
from errors in the motives to action, and from the imagination 
that it may be allowable willingly to do a small evil, if a large 
•amount of good follow it. This is unquestionably a moral 
error, to which men of high powers must, from the conscious- 
ness of these powers, be peculiarly liable. It were painful to 
bring forward instances of their succumbing to the temptation.^ 
It is thus that a power, which seems to be at first wakened 
to life, and to draw its earliest aliment, from the promptings 
of strong desires in man, to unite himself extensively with his 
fellow men, to exist with them, and for them, rather than in 
himself, as it gathers strength, and predominates in any indi- 
vidual, generally renders him so dissimilar to other men, in 
his feelings, habits, motives, and modes of action, that it in a 

^ It is strange that Cicero, as in the following passage, should seem to coun- 
tenance this most common and dangerous of moral sophisms. " Quid ? si 
Phalarim, crudelem tyrannum et immanem, vir bonus, ne ipse frigore confi- 
ciatur, vestitu spoliare possit ; nonne faciat? H<ec ad judicandum sunt facil- 
lima. Nam, si quid ab homine ad nullani partem utili, tuaj utilitatis causa de- 
traxeris : inhumane feceris, contraque natura? legem : sin autem is tu sis, qui 
multam utilitatem reipublic;e atque hominum societati, si in vita remaneas, 
afferre possis, si quid ob eam causam alteri detraxeris, non sit reprehenden- 
dum. — Communis utilitatis derelictio contra naturam est, est enim injusta. 
itaque lex ijjsa naturas, qwx utilitatem hominum conservat et continet, de- 
cernit profecto, ut ab homine inerti atque inutili, ad sapientem, bonum, for- 
temque virum transferantur res ad vivendum necessarite : qui si occiderit, 
multum de communi utilitate detraxerit." — De Officiis, L. III. 

Such reasoning, followed fairly out, would not stop until it assumed the 
form which Sir Walter Scott has given it, in the speech of Anselmo. 

"You are to distinguish, my son," replied the alchymist, "betwixt that 
which is necessarily evil in its progress and in its end also, and that which 
being evil, is, nevertheless, capable of working forth good. If, by the death of 
one person, the happy period shall be brought nearer us, in which all that is 
good shall be attained, by wishing its presence, — all that is evil escaped, by 
desiring its absence, etc. If this blessed consummation of all things can be 
hastened by the slight circumstance, that a frail earthly body, which must 
needs partake of corruption, shall be consigned to the grave a short space 
earlier than in the course of nature, what is such a sacrifice to the advance- 
ment of the holy millenium." — Kenilworth, c. XXII. 

A living author, in the character of Eugene Aram, gives also a striking 
picture of the dangerous tendency of the same sophistry. 



INVENTION SOCIOLOGICAL 145 

great measure separates him from them. Whatever he may 
be, or may hope to be as an inventor, or author, as a man he 
is misconceived and misapprehended. Among the men with 
whom he lives, he lives as not of them, a magic circle is drawn 
round him which neither he can pass without, nor they, 
within. Like the attractive and repulsive powers, which one 
magnetic influence communicates to matter of the same sort, 
the different direction in which the great moving and cement- 
ing principle of society has been made to flow in him, and in 
them, incessantly repels, and keeps him at a distance from 
them. 

This disjunction and isolation affect various natures vari- 
ously. Some cannot endure it ; they cannot live but in the 
constant and intimate sympathy and communion of their 
fellows. They feel all the loneliness, and little of the grandeur 
of the desert. They pant for the land of life, and either turn- 
ing to it, are lost in it, their former existence being remem- 
bered but as the wanderings of a dream ; or they perish, from 
their incapacity to mingle with it. Their finer and gentler 
natures fed, but not strengthened by contemplation, recoil 
from the coarse and boisterous spirits, with whom they are 
brought into contact. They sink in the conflict and pass 
from life itself, 

" A precious odour cast 
On a wild stream, that recklessly sweeps hy ; 

A voice of music uttered to the blast, 
And winning no reply." 

To others of firmer mould, the action of these alternately 
attracting and repelling powers, the passing from one state of 
being to another completely opposite, from the turmoil of 
spirit excited by braving and bearing back a world opposed, 
to the concentration of contemplative solitude, though wasting, 
is invigorating. Like steel which is first made to glow in 
fire, and then plunged in water, the fineness of their temper 
is brought out by the play of opposing elements. It is 
observed by Mr. Moore, in his life of Lord Byron, that but for 
the opposition he encountered, the noble poet had never stood 
forth in might ; that persecution found him, as Eousseau, 
weak, left him strong. 

K 



146 INVENTION SOCIOLOGICAL 

Some, again, the world without afibiding no resting place,, 
entrench themselves in the world within. Their excursions 
outwards, are carried on as into a country permanently hostile. 
To insult, to attack, to overthrow, not to subdue, or establish, 
is their aim. These are the skeptics, men seemingly abandon- 
ing every other hope but that of making manifest their power, 
a power that has often been greater than they themselves have 
conceived, and which, doubtless, would many times have been 
more happily exerted, had they found themselves in happier 
circumstances. When we read, for instance, the speculations 
of Hume, we do not always recollect that he had been a needy 
dependent brother of a Scotch land-holder, had failed in the 
only attempt he had ever made to establish himself in the 
world, by entering on business, and had come to middle life, 
known only as a bookish recluse, unable to do good, and only 
to be tolerated, because he was too inoffensive to do harm to 
any one. Such an existence may well account for much of 
that shrinking within himself, that absence of all heart, that 
habitual distrust, rather rejoicing to overthrow, than hoping to 
establish, which characterize his philosophy. "Who can tell 
how great has been the influence of that philosophy, in pro- 
ducing what has been, what is, and what is to be, in Britain 
and in Europe ? Of this we may be assured, that they are 
least aware of it, who are most affected by it. 

There are yet others of higher minds, who, through hopes 
disappointed, and errors committed, over the waste of the 
world, and the ruins of their own hearts, can look confidently 
and courageously forward, to a brighter, though far distant 
prospect. It is in this spirit that Lord Bacon bequeaths his 
fame to posterity, and it is through it, that he, who has been 
to us so notable a benefactor, yet holds converse with us. The 
manly and generous confidence with which he relies on the 
better parts of human nature, and, in the midst of so many 
discouraging circumstances looks forward to the ultimate reign 
of truth and happiness, constitutes indeed, I may be allowed 
to remark, no small part of the charm, and perhaps of the 
utility of his speculations. 

But, however the opposition between men of practice, anc 
men of speculation and invention may operate, it certainlj 



INVENTION SOCIOLOGICAL 147 

exists, and there are perhaps few of the latter, who have been 
gifted with dispositions so happy, or fallen in times so for- 
tunate, as not to have experienced some of its evils. Never- 
theless, if the view which has been presented be correct, this 
opposition between the two classes, the one engaged in the 
application of what is already known to the production of 
the means of supplying future necessities or pleasures, the 
other, in the discovery of something yet unknown and 
which may serve the same purposes, arises, not so much 
from a difference in the motives to action, as from a diversity 
in the modes of action : and the principles of our nature 
exciting to the advance of invention, would seem to be nearly 
identical with those giving activity to the effective desire 
of accumulation. 

The difference between the two is rather in degree than 
in kind. He who labors to provide the means of enjoyment 
to wife, children, relations, friends, pursues an end in some 
degree selfish. It is his own wife, his own children, his own 
relations, whom he desires to benefit. The fruits of the labors 
of genius, on the contrary, are the property of the whole 
human race. On this account, though, in the individual, 
manifestations of the inventive faculty imply a superiority 
in some of the intellectual powers, they rather imply, in the 
society, a preponderance of the social and benevolent affections. 
It is this general acuteness of moral sensation, and lively 
sympathy consequently with the pleasures arising to the 
individual, from the success of exertions for purposes of general 
good, that can alone excite, and 'nourish, the enthusiasm of 
genius.^ 

^ [In these last two paragraphs Rae seems to run sociological and economic 
considerations together, with a result which is not altogether correct. 
The difference between the two sets of motives under consideration is, 
apparently, one not of degree but of kind. We must certainly admit 
that those who in our society, especially during the last two centuries, 
have made the most wonderful and useful "application of what is 
already known to the production of the means of supplying future neces- 
sities or pleasures " — those who have in our own day given us not the 
knowledge of the properties of electricity, but the incandescent light and 
the trolley — are as a rule men of a certain " practical " type of character, 
who have done this work undoubtedly for money and the things money 



148 INVENTION SOCIOLOGICAL 

But, though there are two of the circumstances giving 
strength to the principle of accumulation, on which the pro- 
gress of the inventive faculty is equally dependent, there 
are yet a set of causes, the effects of which, while they 
paralyze the exertions of the one, rouse the other to activity. 
Whatever disturbs, or threatens to disturb, the established 
order of things, by exposing the property of the members 
of the society to danger, and diminifehing the certainty 
of its future possession, diminishes also the desire to accumu- 
late it. Intestine commotions, persecutions, wars, internal 
oppression, or outward violence, either, therefore, altogether 
destroy, or at least very much impair, the strength of the 
effective desire of accumulation. On the contrary, they excite 
the inventive faculty to activity. The excessive propensity 
to imitation, which is natural to man, seems the only means 
by which we can account for this diversity of effects. Men 
are so much given to learning, that they do not readily become 
discoverers. They have received so much, that they do not 
easily perceive the need of making additions to it, or readily 
turn the vigor of their thoughts in that direction. " They 
seem neither to know well their possesions, nor their powers ; 
but to believe the former to be greater, the latter less, than 
they really are."^ Whatever, therefore, breaks the wonted 
order of events, and exposes the necessity, or the possibility, 
of connecting them by some other means, strongly stimulates 
invention. The slumbering faculties rouse themselves to meet 
the unexpected exigence, and the possibility of giving a new 
and more perfect order to elements not yet fixed, animates to 
a boldness of enterprise, which were rashness, had they as- 
sumed their determined places. Hence, as has often been 
remarked, periods of great changes in kingdoms or govern- 
ments, are the seasons when genius breaks forth in brighest 

will bring. To make money, it must be remembered, is with us the 
conventional standard of success in the realm of atl'airs. 

But when all is said, Eae's teaching holds without a flaw in one re- 
spect, and that is, that every institution and individual activity, economic 
and otherwise, is carried on, and has its being, in the environment ofi 
the general moral order.] 

' Novum Organum. 



INVENTION SOCIOLOGICAL 149 

lustre. The beneficial effects of what are termed revolutions, 
are, perhaps, chiefly to be traced, to their thus wakening the 
torpid powers ; the troubling of the waters they bring about, 
undoes the palsy of the mind.^ 

On this account courage distinguishing well between things 
difficult and things impossible, and calmly estimating them 
not as they appear to vulgar prejudices, but as they are, 
seems to be a necessary element in the composition of genius 
of a high order. Without the possession of such a faculty, it 
is impossible clearly to discern the things which changes have 
brought to light or produced, or to make free use of them. 
The comparison which Lord Bacon makes between Alexander 
the Great and himself, is far from being forced. Neither 
could have accomplished what he did, had he not been able to 
despise what had only a vain show, and to discover and trust 
to real though underrated powers.'^ 

[It may be worth while to add to this chapter a fragment 
of Eae's unpublished manuscript which runs as follows : — ] 

" It is through his intellectual and reasoning powers that 
man has the capacity to call into existence what are called 
the advances of the arts. But these, his intellectual and 
reasoning energies, do not rouse themselves to such enterprises, 
but seem to be dormant within him unless excited by his 
feelings, emotions, passions. In the absolute solitude of the 
wilderness, where his soul is stirred by none of these, he 
degenerates nearly to the level of the brute, seeking only food 

^ [See "Note L" in the Appendix.] 

^ ' ' Atque hac in parte nobis spondemus f ortunam Alexandri Magni : 
neque quis nos vanitatis arguat, antequam exitum rei audiat, quse ad 
exuendam omnem vanitatem spectat. 

"Etenim de Alexandre et ejus rebus gestis ^schines ita loquutus est: 
Nos certe vitam mortalem non vivimus ; sed in hoc nati sumus, ut posteritas 
de nobis portenta narret et praedicet : perinde ac si Alexandri res gestas 
pro miraculo habuisset. 

"At sevis sequentibus Titus Livius melius rem advertit et introspexit, 
atque de Alexandre hujusmodi quippiam dixit : Eum non aliud quam 
bene ausum vana contemnere. Atque simile etiam de nobis judicium 
futuris temporibus factum iri existimamus : Nos nil magni fecisse, sed 
tantum ea quas pro magnis habentur, minoris fecisse." 



150 INVENTION SOCIOLOGICAL 

and protection from the inclemencies of the weather. It is 
in society alone that he finds those intiuences that move and 
feed his moral and intellectual nature, and give him his proper 
life. He is in fact the creature of society, and all his passions, 
emotions, feelings, may in one sense be considered as so many 
social instincts binding him to it. Now in herding animals, 
and in this regard man is a herding animal, it is not the 
individual but the herd that moves. If the individual attempt 
a separate and independent movement [beyond a certain point], 
he is sure to find that it is ineffectual as to the herd, and 
dangerous to himself. If one blessed or cursed with keener 
eyes and a more sagacious nose than his fellows discover in 
the distance fresher and greener pastures, and direct his 
course to them, he becomes a wanderer from the flock, a stray 
one, a lost one. It is the same among men. One whose 
powers transcends those of his fellows and who, trusting to them, 
advances far beyond them, is so bedimmed to their eyes by the 
mists of distance that they think he has gotten out of this 
real, living, and tangible world, and is walking in the clouds, is 
wandering in the unreal splendors of fairy land. It is only 
when by chance the course of subsequent events brings them 
to the spot where they discern the marks of his footsteps, that 
they say one to another, — why, such a one was not in the 
clouds at all : he was walking on solid ground. How blind 
was man in those days ! Such a one is said to have come 
before his time, or, which is much the same thing, to have 
been out of place." 



CHAPTEE X. 

■OF THE CAUSES OF THE PROGRESS OF INVENTION AND 
OF THE EFFECTS ARISING FROM IT, AS IT CONCERNS 
ITSELF WITH THE MATERIAL WORLD. 

Invention is the only power on earth that can be said to 
create.-^ It enters as an essential element into the process of 
the increase of national wealth, because that process is a 
creation, not an acquisition. It does not necessarily enter 
into the process of the increase of individual wealth, because 
that may be simply an acquisition, not a creation. 

Would we take time to consider of it, we must perceive 
that such an increase of national capital as individuals [usually] 
make of individual capital,^ is at least, unlikely, seeing there 
is no apparent cause for it. Considering capital in general, 
the only use we can discover for it is its enabling the com- 
munity to draw from the resources the country affords, the 
necessaries, conveniences, and amusements of life, its supply 
of which, according to our author, constitutes its real wealth. 
It is only so far as it is instrumental to this end that we can 
see a use, and therefore find a reason, for its existence. Now, 

^ I make use of the term creation, because that of production, which other- 
wise I should have preferred, has been employed in another sense. I trust my 
motives will not be misconceived. " Etiam inventa quasi novse creationes sunt, 
et divinorum operum iraitamenta, ut bene cecinit ille : 

'•' Primum frugiferos fcetus mortalibus agris 

Dididerant quondam prtestanti nomine Athense : 
Et recreaverimt vitam, legesque rogarunt." 

Novum Organum, GXXIX. 
2 [That is, a mere "accumulation," or "multiplication of items."] 



152 INVENTION ECONOMIC 

as one individual is more provident and prudent than another, 
we can easily conceive how one may come to procure for 
himself a greater share than another of the national funds, the 
means, or instruments, serving to unlock the stores which 
the nation [already] possesses ; but it is not so easy to con- 
ceive how, or for what purpose, a general increase of these 
means or instruments should take place, without some accom- 
panying discovery of an improvement in their construction by 
which they may put additional stores within reach of the nation. 
We may easily perceive this, by attending to any of the 
numerous small items of which the national capital is com- 
posed. I shall take an example of a very small one. The 
only instrument used for threshing out grain in G-reat Britain, 
until of recent years, was the flail. Hence one or more flails 
formed a part, though a small part, of every farmer's capital, 
and therefore all the flails that all the farmers had, a part, 
though an exceedingly inconsiderable part, of the national 
capital. So simple an instrument and one so easily formed, 
was made, I believe, generally, by the farmer or his servants, 
though sometimes by professed mechanics. In whatever way 
fabricated, it is evident, however, that the number of flails 
made, though from the convenience of having a supply pro- 
vided beforehand they would exceed, could never much ex- 
ceed, the number of persons employed in the operation of 
threshing. A professed flail-maker, indeed, if diligent and 
intelligent, might, by the aid of these qualities, have been able 
to make them cheaper than his neighbors, and, if economical,, 
to extend his business and come to have some amount of 
capital in this shape. But, though thus, by his industry and 
frugality, an individual might have accumulated capital under 
this form to an extent to which we can set no precise limits, 
the national capital never could have been so increased, 
because, if one person by greater diligence and activity made 
more flails, another, from a deficiency of these qualities, would 
make fewer ; or, if we suppose all the makers of the instru- 
ment to be alike industrious, and thus the stock of it to 
accumulate so as to do more than supply the wants of the 
threshers, the article would remain on their hands, and they 
would naturally cease to produce the superabundant supply. 



INVENTION ECONOMIC ^ 153 

While, therefore, the instrument retained this less perfect form, 
it is, I think, pretty evident, that, though individuals might 
accumulate capital by making flails, neither the national 
capital, nor the national revenue, would be much increased 
by their efforts so directed. 

About forty years ago, the easier and more perfect method 
of executing this process, by what is called the threshing- 
machine, was invented. This new instrument, though far 
more expensive than the former, yet, performing the operation 
more effectually, and with much less labor, became naturally 
things which farmers were desirous of having. A farmer could 
have had no motive to accumulate but a very trifling capital 
in the shape of flails, because half a dozen were as useful to 
him as half a thousand ; but he had a great motive to accumu- 
late a considerable capital in the shape of a threshing machine,, 
because it would save him much annual expenditure of labor, 
and the operation so performed, separating the grain more 
effectually, would give him a small addition to the corn yielded 
j by his subsequent crops. Accordingly its invention was fol- 
I lowed by the accumulation in this form of a large amount of 
j capital, and so by an increase of the whole agricultural capital 
I of the nation. But, besides this direct effect, the saving it 
' produced in one of the main processes of agriculture augmented 
the profits of the farmers, and tended, therefore, to make all 
farmers cultivate their farms more perfectly, and some to 
engage in improving land not before cultivated. Both the 
direct and the indirect effects of this invention, therefore, 
must have helped, in no inconsiderable degree, to augment the 
agricultural capital, and so the whole capital of the nation.^ 

"It readily occurs to every individual that the quantity of 
hardware, the number of pots and pans, is in every country 
limited by the use which there is for them ; that it would be 
absurd to have more of such utensils than are necessary for 
cooking the victuals usually consumed there ; and that, if the 
quantity of victuals were to increase, the number of pots and 
pans would readily increase along with it, a part of the in- 
creased quantity of victuals being employed in purchasing 
them, or in maintaining an additional number of workmen. 

i[In this paragraph Rae closely follows Lauderdale.] 



154 INVENTION ECONOMIC 

whose business it was to make them." ^ JUit, though the 
national capital cannot thus be supposed to accumulate in the 
shape ol" an additional number of pots and pans [of any 
fixed type], individuals who deal in hardware frequently 
accumulate capitals in this shape, to a large amount. We 
can easily conceive, that the national capital also might 
accumulate in this shape, were some discovery, producing an 
improvement in the manufacture, to occur. Were a method 
iliscovcred of procuring and manufacturing platina, or some 
metal similar to it, at only four or live times the cost of 
brass, it would, without doubt, be employed in the fabrica- 
tion of kitchen utensils of all sorts. Not being acted on by 
tire, and other destroying agents, it would save a great deal 
of the drudgery of the kitchen, and, though more costly at 
first, would probably, on the whole, be preferred by good 
economists. Thus, pots and pans becoming more expensive 
articles, the amount of national capital, or stock, accumulated 
in them, would be much greater, and, through this improve- 
ment, the whole national capital would, with advantage to 
the society, be somewhat augmented.^ 

If any one will, in a similar manner, consider any of the 
other articles which help to make up the national capital, I 
tliink he will have difficulty in assigning a sufficient reason, 
from any of the views presented in the Wealth of Nations, 
for its increase, unless he connect this increase, somehow or 
another, with some improvement in the particular department 
of industry of which its production makes a part, or in some 
other department dependent on it. lie will perceive, that, 
though there is no difficulty in conceiving that an individual 
may accumulate a very large capital in the form of any of 
those articles or connnodities, the total of which make up 
the national capital ; with the exception, perhaps, of money 
itself, there is difficulty in discovering a reason for the accumu- 
lation of any of them, throughout the whole connuunity, so as 
to form any sensible addition to the national capital. 

It may perhaps appear, that, in whatever shape the indi- 
vidual members of the community may accumulate capital, 

1 Wealth of Nations, B. IV. c. I. 

'■'[For use of Ici'ins, see the end of the chapter.] 



INVENTION ECONOMIC 155 

yet, that the efforts of the greater number being thus directed, 
they might accumulate it under some shape or another. We 
are not, however, it will be recollected, here discussing a 
possibility, but a self-evident principle ; not what might be, 
but what must be. Now, there is no necessity for imagining 
that this must be the case, for, "nthout entering at all into the 
minutife of the subject, it is not difficult to perceive that the 
action of the principle which prompts to save, itself brings 
about a state of things, which diminishes the desire to save. 
A person must be most desirous of getting money when he 
perceives, that by the acquisition of it, he could make a great 
deal out of it ; when it is manifest to him, that, if he had a 
sufficient capital, he could enter on some branch of business 
that would be very profitable. When an opening of this sort 
presents itself to a prudent and enterprising, though poor man, 
the exertions he makes to gather together a small sum are 
sometimes almost incredible. But, if the principle were to 
prevail so generally as to fill up every branch of business 
within the society, the desire to acquire capital so as to enter 
on some of the particular businesses carried on in the society 
would naturally be diminished throughout the whole country ; 
and this general diminution of the motives to accumulate, 
might be sufficient to preserve the national capital within the 
bounds it had acquired, and prevent it, for a time, from gaining 
farther increase. 

Nor is there any thing in the appearance of human affairs, 
which should induce us to conclude that the increase of 
national capital ever does, in fact, proceed, unless in con- 
junction with some successful effort of the inventive faculty, 
some improvement of some of the employments formerly 
practised in the community, or some discovery of new arts. 
If we cast our eyes over the results which either reading or 
observation presents to us, concerning the condition of different 
nations, we gather from our review, that many of them, in 
regard to the acquisition of wealth, have apparently remained 
stationary for ages, although undisturbed by external violence, 
and unmolested by internal tumults. During all the time, 
however, the process of individual accumulation was going on ; 
men were continually rising from poverty to affluence, founding 



156 INVENTION ECONOMIC 

families, aud leaving wealth to their descendants : but this 
wealth passed away from them ; what the father gathered was 
not able to maintain his race, and they gradually sank to the 
rank from which he had emerged. The proportion, meantime, 
between rich and poor, and the total wealth of the community, 
remained but little changed. 

At length, in some quarter or another, an improvement 
began to be perceived. What do we find to have been the 
most prominent accompaniment of this change ? Is it a 
diminished expenditure — an increased parsimony — a frugality 
before unknown ? I believe not. Any great diminution of 
the expenditure of a whole community, it will be found 
difficult to trace, but we shall always discover that invention 
has somehow or another been busy, either in improving agri- 
culture and the other old arts, or in discovering new ones. 

It is only when some great and striking improvement issues 
from the exertions of the inventive power, that we in general 
attend to its effects. Every one readily grants, that, but for 
the invention of the steam engine, the capital of Great Britain 
would want much of its present vast amount. We perceive 
not so readily the numerous small improvements, which have 
been gradually, from year to year, spreading themselves through 
every department of the national industry. But, though not so 
palpably forced on our observation, we pass them by, they never- 
theless exist, and sufficiently account for the manner in which 
the national capital has iDeen augmenting, by being gradually 
accumulating in them, without the necessity of supposing that 
it ever has augmented precisely as that of individuals generally 
does, by a simple multiplication, under the same form, of any 
or all the items of which its amount was before made up.^ 

Adam Smith himself admits, that a country may come to be 
fully stocked in proportion to all the business it has to 

i[Rae goes too far here and gives improperly a coUectivist bias to the whole 
discussion. Because individuals may increase their capital merely by a process 
of simple multiplication (or, as he calls it elsewhere, by a process of "acquisi- 
tion " in contrast to one of '• creation"), it does not follow that "generally " 
they do so accumulate. The antithesis should not be between the individual 
and society, but between the principles of invention and mere acquisitive 
accumulation (which Rae himself brings out later), working in diflferent 
individuals. After all, it is the individual who invents, not society.] 



INVENTION ECONOMIC 157 

transact, and have as great a quantity of stock employed, in 
every particular branch, as the nature and extent of the 
territory v^ill admit. He speaks of Holland also, as a country 
which had then nearly acquired its full complement of riches ; 
vs^here, in every particular branch of business, there was the 
greatest quantity of stock that could be employed in it.^ It 
would then appear that, even according to him, the principle of 
individual accumulation, as a means of advancing the national 
capital, has limits beyond which it cannot pass. The same 
cannot be said of that increase which is derived from the 
attainment of those objects at which the inventive faculty aims. 
Had Holland, sixty years ago, been put in possession of the 
astonishing improvements in mechanical and manufacturing 
industry, which, since that period, have sprung up in Great 
Britain, who can suppose that she would have wanted ability 
to continue in the successful pursuit of wealth ; or, that she 
would not have started forward with fresh vigor in the career, 
and advanced in it with greater rapidity than in any former 
period of her history ? 

There is no avoiding the admission, that, to every great 
advance which nations make in the acquisition of wealth, it is 
necessary that invention leading to improvement should lend 
its aid ; and, granting this, it necessarily follows (as when one 
cause is discovered sufficient to account for the phenomena, we 
should confine ourselves to it), that we are not warranted to 
assume that they make even the smallest sensible progress 
without the aid of the same faculty. 

To this general observation there are only two apparent ex- 
ceptions. The progress of commerce by the increase of some 
particular branch of it, or by the opening of fresh branches ; 
and the settlement of new countries. 

If these, however, should be esteemed exceptions to the obser- 
vation with regard to any particular nation or nations, they are 
•extensions of it with regard to all the nations of the earth ; im- 
plying that the increase of general wealth is connected with 
the general spread of invention, or inventions, over the world.^ 

1 Wealth of Nations, B. I., c. IX. 

^[The two foregoing interpolations are from Bk. I., Chap. I., of the 
original ; the first from p. 15, the second from pp. 19-24.] 



158 INVENTION ECONOMIC 

Besides the circumstances determining the progress of in- 
vention arising from the nature of man, the inventor, there 
are others depending on the modes in which the principles of 
that nature are excited to exert themselves in this sphere of 
action, and gradually to discern and develope the qualities and 
powers of the various divisions of the material world. 

The surface of the earth presents a vast variety of materials. 
Soils, climates, minerals, vegetables, the fish of the waters, the- 
birds of the air, and the beasts of the field, are endlessly diver- 
sified, and, could we bring back the surface of the globe to the- 
state in which it existed when man first made his appearance 
on it, we should probably scarcely find any two points in all 
respects alike. 

This diversity of materials seems to have been [originally]: 
the great exciting cause to the progress of art and science, men 
having been every now and then compelled or induced to 
adopt new materials, and, as they changed from the one to the 
other, to have been gradually led from the knowledge of the 
most simple and obvious qualities and powers, to a perception 
of those which are more complex, and difficult to discern. 

Tracing any invention upwards to its first beginnings, we 
shall discover that these have been exceedingly rude and 
imperfect, proceeding from the simplest, and what would seem 
to us, the most obvious observations ; and that it has advanced 
towards perfection, by having been led to change the materials 
with which it originally operated, and passing from one to 
another, has at each step of its progress discovered new quali- 
ties and acquired new powers. 

I believe a lengthened inquiry into the history of inventions 
would lead to the following conclusions : — 

1st. Arts change materials. It having become difficult or 
impossible for men to obtain the materials with which they 
had been accustomed to operate [in any branch of industry], 
they have been led to adopt others, and, retaining the know- 
ledge of the qualities and powers of the old, have added to 
them those of the new. 

2d. Different arts adopt the same materials. Men have 
been encouraged to operate with new materials, from materials 
being presented to them evidently better suited to their 



INVENTION ECONOMIC 159 

purposes than the old, could they be made submissive tO' 
their art. 

3d. The operation of these circumstances has slowly dimin- 
ished the propensity of mankind to servile imitation, and given a 
beginning to science, by bringing to light the qualities and powers 
common to many materials — the general principles of things. 

The limited objects of the present inquiry, however, forbid 
our entering into the lengthened train of speculation, that 
would be necessary fully to establish these conclusions by an 
adequate investigation of the progress of inventions. I shall 
content myself with adducing a sufficient number of instances 
to show, that this continual change has been a circumstance 
operating very beneficially and efficiently, in enlarging the 
bounds of human knowledge and power. 

When men are deprived of the materials with which they 
used to operate in the production of necessaries, and between 
them and want have only such as are similar, but not the 
same, one of two things must happen. They must either 
conquer the difficulties of the new matter, or must perish. In 
the earlier ages of the world, it is scarce to be doubted, that 
the latter event was of not infrequent occurrence. Tribes 
forced from their homes by more powerful tribes, must have 
been often led by hope, or driven by despair, into regions that 
had not before yielded to the dominion of man. But the 
materials which different regions present to human industry, 
are very seldom precisely alike. The new would differ from 
the old, in being in some respects worse, in others better 
adapted to its purposes, than they. The difficulties are much 
more apparent than the benefits, the former having generally ta 
be overcome, before the latter be apprehended, or distinctly 
perceived. The attempt, then, would probably never be made, 
but for the promptings of necessity. Its success has twa 
advantages. The subjection of the obstacles carries the inven- 
tive faculty a step farther forward ; the larger returns made, 
owing to the circumstances in which the new material is 
superior, increase the rewards of industry. As the success of 
the attempt would advance the skill and the power of those 
who made it, so its failure would abandon them to famine. In 
the former case, the individuals whose intelligence and courage 



160 INVENTION ECONOMIC 

overcame the obstacles, would be exalted by posterity into 
gods aud deiui-gods ; in the latter, the field would reuiaiu open 
to more successful essays, in other times, aud by other races. 
An inquiry, however, into the progress of the arts essential to 
the existence of man in any form of society, would carry us 
back to ages too remote, and involved in an obscurity too deep 
to penetrate. 

None of the arts which are not necessary to the preservation 
of human existence itself, has probably had greater influence 
on the modes which that existence has assumed, than metal- 
lurgy. Without the metals, it would be impossible for the 
series of instruments to be continued from which the wants of 
civilized society are supplied, and without them, consequently, 
mankind could never have emerged from barbarism. There 
are few arts, either, in which the processes have probably at 
tirst been more rude, in which they have ultimately attained 
greater perfection of skill, or in which the progress has been 
more gradual, and more dependent for its advance on the 
variety of the materials operated upon. Some metals are 
found in quantity pure ; the ores of some are easily reduced, of 
others, with great difficulty. Of all the substances he attempts 
to classify, none, from their number and variety, give greater 
trouble to the mineralogist. The discovery of the qualities of 
such portions of these metals as were found pure, would soon 
make them be considered as the most useful of substances, and 
occasion their being sought after with avidity. The supply 
of them in this state being exhausted, or they who had 
employed them moving into regions where they could no 
longer be found, recourse would gradually be had to the 
less pure and less easily reduced ores, and from thence to 
metals and ores wrought with still greater difficulty. Thus 
we find that gold, silver, and copper, the metals that most 
frequently occur native, were those first in use ; iron came 
last, and was probably then esteemed the most precious. 
Weapons of gold and silver were edged with it, in the same 
manner as were wooden implements, such as the old English 
spade, in more recent days. But for the gentleness of the 
ascent, it is altogether likely, that the art would never have 
attained the eminence it has gained. Had the earth, for in- 



INVENTION ECONOMIC 161 

stance, possessed no metallic stores but the more abundant ores 
of iron, by far the most useful in the present days, it seems not 
unlikely, that no metal would ever have been wrought. The 
steps by which it rose, were, however, too numerous, and the 
vestiges left of them are too indistinct, for me to attemjjt here 
to trace them, were I even prepared so to do. I prefer rather, in 
illustration of the subject, to refer to an art which has been in prac- 
tice for thousands of years, and to an implement in daily use. 
The plough, in its most simple form, is an instrument the 
invention of which would naturally follow the domestication of 
the ox species. Men accustomed to loosen and stir the earth, 
with the inefficient implements of that ancient period, could 
scarce in time fail to remark, that the sluggish strength of 
this animal might aid them in the operation. They seem to 
have turned it to this purpose, by a very simple contrivance. 
A long crooked sapling, similar to the clubs used by boys in 
some of their games, but larger, had its thick, curved end 
sharpened to a point, and its other extremity attached to 
something like what is now called a yoke, coupling two oxen 
by the neck. The long straight part of the implement passed 
between the animals, the part turned downwards rested on the 
earth behind them, and when they moved forward, along soil 
very easily impressed, would mark it with a furrow, which 
might be deepened by a man walking close after, and pressing 
it downwards. He was assisted in this operation by the 
addition of a handle projecting upwards, the point was hardened 
by the action of the fire, and another person guided the oxen. 
Such was probably the earliest plough, and those that are used 
in many parts of the east, to this day, differ not much from it, 
with the exception of the point being defended by a sort of iron 
tooth, and the wood not having a natural, but an artificial 
curvature. In Java, a man when he has done his day's work, 
carries home his plough on his shoulder, as a woodman does 
his axe. The defects of such an implement are to us very 
plain. It only scratches the soil, it cannot make what we call 
a furrow, and it is only very light, sandy soil, or the sort of 
mud in which rice is cultivated, on which it is at all capable 
of acting. As the quantity of this sort of soil is in all parts 
of the world limited, men were gradually forced to attempt the 

L 



162 INVENTION ECONOMIC 

tillage of land more difficult to subdue. Over the greater 
part of Asia, they have done so, by a simple enlargement and 
strengthening of the first rude implement. The model im- 
mediately before their eyes seems to have so confined their 
powers of invention, that they attempted no change but this. 
In that part of the world, if we except China, and the countries 
bordering on Europe, the earth is consequ entlyscratched, or at 
best stirred, it is not in our sense of the word ploughed. The 
improvements v^^hich we have made in the operation are two- 
fold ; the first concerns the effect produced on the soil, and the 
second, the ease with which it is produced. The furrow we 
form makes each portion of soil operated upon, describe about 
one third of a circle, thus blending all the parts of the surface 
together, leaving it very open, and placing the vegetable fibres 
in the position best suited to induce decay. The turn, too, 
thus given to each portion, puts it out of the way of the next, 
which is therefore, with comparative ease, moved into its proper 
position. 

It seems not to have been until the instrument got to 
Europe, that it assumed a form capable of executing such an 
operation. Such was probably the Roman plough, the wood- 
work of which is thus described by Virgil : 

" Continuo in sylvis magna vi flexa domatiir 
In burim, et curvi formam accipit ulmus aratri, 
Haic a stirpe pedes temo protentus in octo, 
Bina? aures, duplici aptantur dentalia dorso. 
Ca?ditur et tilia ante jugo levis, altaque fagus, 
Stivaque, quae currus a tergo torqueat imos ; 
Et susjDensa focis explorat robora fumus. 

An elm bent with great strength in the woods, is forced 
into a huris and receives the form of the crooked plough. To 
it are fitted the tcmo stretched out eight feet from the lower 
end, the two aures, the dentalia with the double back, and the 
stiva which bends the lower part of the plough behind. The 
light lime tree is felled beforehand, for the yoke, and the lofty 
beech for the other parts, and the smoke seasons the wood 
hung up above the fire." ^ 

I see not that this h(7'is, which has given some of the 

^Georgic I. 170. Translated by Adain Dickson, Hutthandry of the Ancieitts^ 



INVENTION ECONOMIC 163 

commentators a little trouble, can be any thing else than the 
original crooked sapling, here swollen to a large elm knee, form- 
ing the body of the plough, infiexi grave rdbur aratri, and to 
which all the other parts are appended. From it, instead of 
the longer straight part of the sapling, stretched forward a 
separate piece, termed the temo or pole, and the stiva, or handle, 
was retained. So far there was very little difference from the 
original instrument, but in the aures, the ears, we have the 
beginnings of the mould board, and there is a place for the 
reception of the vomer, the large cutting iron share. These 
appendages, the more difficult soil of some parts of Italy prob- 
ably introduced ; and when adopted in one part, they could 
scarce fail to spread over it all. 

The plough thus changed into an instrument for turning 
over, not merely stirring the soil, was carried by the Romans 
into other, and more northern regions, and transmitted to 
other races. These and subsequent revolutions, obliterated the 
imitation of the original curved sapling. The curve became an 
angle formed by a short downright beam or pillar, the sheath 
or forehead, fitted into the shortened pole or temo, and bearing, 
as before, the chief stress of the draft. Greater symmetry and 
lightness were thus given to it. The mould board gradually 
attained its present form, the coulter and another handle were 
added. In recent days, it has been made nearly altogether of 
iron. In Britain, where this revolution in the material was 
introduced, it is deserving of notice that the metal implement, 
only that its parts are slenderer, is an exact copy of the 
wooden one. There is yet too the sheath. In some, at least, 
of the American iron ploughs, the sole connexion between the 
upper and lower parts, unless that given by the mould boards 
themselves, is a strong bolt screwing tight. For a plough of 
such materials, this last metamorphosis of the original sapling 
or huris, would seem the better construction. 

Thus, the moving of this implement from one region and 
people to another, the consequent adaptation of it to different 
and more difficult soils, and the change of the materials of 
which it is formed, seem to have been the occasions of its 
successive improvement. They have stimulated the faculty of 
invention, and weakened the propensity to servile imitation. 



1G4. INVENTION ECONOMIC 

The instrument, so changed, it may be remarked, is on its 
return to countries in which, perhaps, it first assumed form. 
English ploughs are to be seen in India, and some modification 
of them must, in time, become the general plough of the 
country. 

Our next example of the effects of these circumstances on 
the development of the inventive faculty, will be taken from 
the progress of sacred architecture. It conspicuously exhibits 
the strength of the principle itself, and the trammels by which 
its energies are sometimes confined. 

When men worship the deity, they find their devotional 
dispositions assisted by the presence of external objects, par- 
taking of his attributes. Thus, whatever brings sensibly 
before us the ideas of very great power, and unlimited dura- 
tion, fills the mind with thoughts that are very near akin to 
tlevotion. Hence, men in almost all ages and countries, have 
either made choice of particular natural objects, inspiring such 
ideas, as concomitants of their devotions, — they have wor- 
shipped turning to the sun, or in groves, or on the tops of 
mountains ; or they have formed things, having in their con- 
ceptions a sort of unison, in this way, witli the object of their 
worship. 

Of all the people who have employed themselves in forma- 
tions of this sort, and devoted a portion of their industry to the 
construction of instruments serving, in some degree, to satisfy 
those natural longings of the human mind after something 
bringing before it the perfections of the deity, none have been 
more eminently successful than the Egyptians. The sudden- 
ness with which the art there attained an excellence, that even 
now commands our fullest admiration, is a phenomenon well 
deserving the attention of speculators on the extent of the 
human powers when roused to free and active exertion. 

Several circumstances seem to have contributed to deter- 
mine the form which architecture there assumed, and to carry 
it at once from infancy to maturity. 

One of the manifestations of power most apt to attract the 
notice of men in the early stages of society, as very great, is 
tlie moving of large blocks of stone. To men altogether igno- 
rant of the mechanic powers, however strong and numerous, to 



INVENTION ECONOMIC 165 

move a cubic stone of the weight of only two tons would be 
impossible ; for, enough of them could not get hold of it. To 
men again, having made a certain degree of progress in art, 
and aware of the advantage, for instance, of the lever, though 
it might then be practicable to move into an upright posi- 
tion pillars of even a few tons weight, such objects would 
still seem very striking displays of power. They would also 
impress them with the ideas of extended duration, which the 
indestructible nature of the material, is calculated to produce. 
Accordingly we find that the erection of such columnar masses, 
has been a very common act of men, in rude states of society, 
in their efforts to draw themselves near to some conception they 
have had of the great first cause. 

But it is not mere blind power, and eternal duration, that is 
attributed to the deity ; besides this, all men ascribe to him un- 
erring wisdom, and most men, boundless benevolence. Eegu- 
larity of design, then, especially if combined with visible utility,, 
renders any object of great and changeless power, more fitting 
to inspire religious sentiments. On this account the sun, of 
all objects continually before our eyes, is that most generally 
turned to with religious feelings. 

Symmetry of design may be given to collections of columns, 
by preserving them at regular distances, and forming them 
into circular, or straight lines. The circles of the Druids in 
Scotland, and in other parts of Europe, are examples of this 
sort of form. Greater unity would be given to an erection of 
this sort, by the addition of horizontal pieces, stretching from 
the top of the one pillar to that of the other, and partially 
roofing in the fabric. Such an addition would also heighten 
the notion of power embodied in the work. The poising large 
masses of stone on the summits of elevated columns, must 
have appeared a stupendous exertion of power, to those who 
first contemplated it. Such seems to have been the character 
of the famous druidical temple of Stonehenge. A form similar 
to this, would therefore seem likely to be that, which the 
ancient Egyptians must have been inclined to give the religious 
edifices they constructed, when leaving the higher grounds, 
they began to descend and occupy the plains ; and such is, in 
fact, the general outline which the ruins of their edifices yet 



IGG INVENTION ECONOMIC 

preseut. l>ut tlioy possessed arts whieh enabled them to give 
their edifices a degree of grandeur, far superior to the rude 
structures of the ancient Britons. 

They were probably eitlier themselves workers of stone, or 
had the means of knowing how stone may be wrought. The 
more ancient Troglodytes were perfect in the art of cutting 
stone. Their labors were confined, however, to forming ex- 
cavations in rock, they do not seem to have ever tlionght of 
dividing these rocks into fragments, and again reuniting them 
into some required form. Indeed, this is an idea, that could 
not very readily occur as a means of facilitating the formation 
of structures of the sort. Here, as in other instances, the 
beginnings of art are simple, but laborious. It is invention 
that abridges the amount of labor necessary for attaining the 
end, and substitutes skill and contrivance, for toil and per- 
severance. A sort of necessity, brought about by the occupa- 
tion of a new region, and the desire to have rocky edifices on 
the alluvial plane, probably led the Egyptians to effect this 
revolution. 

The possession of another art. made it of less ditficult execu- 
tion. Egypt, a long level valley periodically overflowed, 
afforded peculiar facilities for the transport by water, of even 
the heaviest articles. The largest masses separated from the 
rocks that bordered the great canal, into which it was trans- 
formed during the time of the inundation, had only to be 
moved to rafts stationed close by, when they could be trans- 
ported to any required situation. The riches also of that 
celebi-ated valley, then probably recently exposed to human 
industry by the retiring waters, and which the etVorts of fifty 
centuries have not yet exhausted, gave the inventive faculty 
ns its instrument, an almost unlimited command of labor. 
Genius was not wanting to reach lofty conceptions, or to 
apply the means put in its hands so as to give them an 
adequate form. The works it produced were the admiration 
of antiquity, and are the astonishment of modern times. 

Architecture, with the other arts of Egypt, was carried to 
Greece. It retained, nevertheless, the same essential character, 
the effects it produced arising from the magnitude and propor- 
tions of massive blocks, arranged in colunms and transverse 



INVENTION ECONOMIC 167 

pieces. A comparison of the two does not give the one much 
superiority over the other. Both possess sublimity and unity 
of design, and beauty of execution, and if the Grecian has 
greater elegance, the Egyptian has greater grandeur. But if 
the colony did not much excel the parent country in archi- 
tecture, there is no comparison between them in the sister art 
of sculpture. Architecture and statuary were combined by 
the ancient Egyptians. The earliest human figures cut in 
stone, that have come down to us, are those executed by them, 
on their columnar fabrics. They represent the human body 
in one position. The arms close to the trunk, the legs close 
to each other, the back applied to the block, of which the 
statue is a part. This position of the body forms evidently 
the most easy design which a novice in the art, when first 
attempting to shape in stone some representation of the 
human figure, could conceive. That the Egyptian artists 
should have commenced with such figures, seems natural 
enough, but that, after having learned to execute the pro- 
digious and highly finished works in statuary, which they have 
left, they should still have adhered to this position, can only, 
I apprehend, be explained from the influence of the spirit of 
imitation. The achievements of the ancient Egyptians, in the 
whole art of shaping stone into forms giving the ideas of 
sublimity and beauty, may well be supposed to have filled the 
minds of their descendants with awe and admiration, since 
their remains so powerfully affect even men of the present day 
with these sentiments. It is scarcely in human nature greatly 
to admire any productions of genius, and to form others much 
surpassing them. Under the influence of such a sentiment, 
men are rather inclined to confine their efforts to making 
additions, than to exert them in attempting alterations, prud- 
ence whispering, that the former will be received as sufficient 
proof of their capacity, while the latter might be censured as 
proceeding from their arrogance. When a certain point has 
once been gained, future artists seek the principles of their 
operations, not in the powers of nature and of man, but in 
what they term the rules of art. These rules seem to have 
effectually confined the art of statuary, as far as the human 
figure was concerned, to the limits marked out by the first 



HIH INVKNTION I'UONOMK! 

liHMliyM. I*'.vrii li;.Mlir;i in | Mil relit I II liiiil I. lie Mllliic cliii I'ilC.lii't', llli 
il|i|irllill\ liriii;.' |illl: lu llll^ llliciv, illtlicMli Vti ul' I lin ()ri|j;illlll 

.'ihiiio liliicK. 'I'lic ii';il,iiiiiiin|j, iiilliiciD'i' of llir .'t|iitil. (if iinilii 
lltiii JM K'IiiIi'IimI iiion^ rMiiiiil'lvillilc, liuiu the li;.';iii'rM of Mir 
inrmior luiiniiilM linn;.', nxniilril vvilli rniiMidniililo M|iiril.. 

Wlion liic Mil. wiiH I iiimhIoi iimI I,o (iriMicc, llic cimn^n dl 
('oniili'V iiinliil il.M I I'lininii'ln, mikI IIm lU'odiiciioiiM mhsiiiikmI nil 
llir hie, |j;i'iiri\ iinil linmly, uliicli viii'viii;', iiiitl mil. mill ill l.iliides 
brill (i\v. 

'I'lir niccliiiiiical juiii ul' iiicliili'rl.iiK^ iiinlciwcnl. ii. n^voltil inn 
iiiiinn^' llir nuliiiiiM iJiiii Wi'Vc linuJIy cnnMiilMliilcd inlu the 
Ivoiniiii l'lni|iiir, liy llin iid(i|il mii nl llin iiirli, iiiid I. ho (Mnphiy- 
iiioiit' nl' criiKinl. Thr M^';y|>liiinM and (licciaiiH wtiro Ml.oiuf- 
(nittoi'H ; lJi(t h'uniiiiiM, luaMntiM. 'I'ln^ Mpiril. nl' iniitiiljnii 
|ii'iU'enli'd Ihin ('lutn|.',r in Ihc inaliMial pari, Iroin |irti(hii-iiiv'; 
iniiiifdialcly, ii ('(irr(ni|Mitidiii|.>, ('Iiiiii;.>;c in llu^ ideal. Iliider liiii 
h'liniiin.'i, I he arch and Ilir ((iliiiiiit were ((iiiihiiKMl. II \va.H 
iinl. iiiiliil iiiltM' IIk^ nun ul llir l«liii|)iro, vvIkmi aichitiM-inro 
re(-(iniiii(iii(-n| iiin(i!i<' dllici larr.i, Ihal \l aM.'iiininl a nmv rnini. 
U()rr()H|i()lidnnl In lln' ( liiiii<.'r III Mic iiirchaiiii a I pari, and .snilcd 
to IIk^ piirpoMCM and t iiiu^h. 

VVh(ni ailn, (il.licr Miaii IIuimi- nl' liioii' nalivc wildn, lir.sl, 
ht'j.'.an lo he any Ihiii;.', In mii iiidi^ aiitt^MloiH, tho ill't of Uw 
niiifuiii, irciMvi^d hy llmin I'mni I he h'ninaiiH, vviih prnpcuiy Iho 
capacily nl MJiapin;-', u Mioiiy niiiHM inln u rnnn, icalizin;.^ S(tnl(^ 
of Ihrii iiiiai'iiial iniiM, Ikiiii nialnialM. wliiih cniild he cilMily 
tianspniled In I he pnml icMpiired. VVIide Ihe l'l;.';ypl.iiillH and 
(liciianM had had l.n npply Muur povvi^iii In chan^iii;.; Ihe limiie.s 
and po.siliniiM nl" iiiaMMeii nl' i'ne|<H, thoy |)O.SH0Hsed the ml nl 
eniuil met ili^^ a rneUy iiiaHH, The iii.slrmiieiil (»!' the hniiiei 
WiiM the ehifiel, In eaive inln MJiape. nl' Ihe lalier, liini\ to wni k 
nill In ;iliape. The li(\!-;inniii;',s nl' ihe rnniier all in Afrien. 
and nl' Ihe lalUM' in JMiiope, art* niaiUed hy Ihe Hiune lavi;ih 
i*xpeiidilure nl' human lahni'. lhoii;^h in diH'ei(>nl innde.s. In 
the rminer, Ihe human hand, ;iln\\ly, l>y diiil nl' .slrnkeM iiiler- 
luilled nul Inr eeneialmuM, i\[\>.\ nut eave.s. ni' carved pillaiH. 
In I Ik* lalU^r, nJMn, the human hand eemenled Minall I'la^^nienls 
nl' cnclv In ;imall I'lajtmenlM, till iii Ihe lap:e ul' years, liie inasM 
|-',raduidly .'iwelled mil iiilu ;iume dcMred lurm. Tin* exleid nl 



ISVKSTI()S J/:ONOM/r \(/.> 

.he oiJfimtUjtkH of the (mii was limiU'A, by the ycm^a of in- 
dustry, to put Large blockii and c/Anmrtu of «tone into the 
rc/^n'miUi po«itioa«, and hy the strength and durability of ttuj^e 
uiii.\.<;r\ii\H. The operationi* of the other again, were limited^ 
?>^>lely, by the fs^Anmiva (imXiiim of the rna.»» it forrne^l. The 
effwt at which F>oth aiumi, grandeur, the union of power^ 
durability, and useful design, was mainly produc^j^l in the 
i'otuKir, by the vastn<jss and synunetry of the mvand parts, in 
the ktt/jr, by the sante qualitwjs I'jtmbuifA in a wlioh}. 

The art was probably at first apphVl in motlani Kurop^^, to 
the construction of placA^ of strength, Solidity to resijijt the 
l>att«ring engin^^, height U> prevent the i<>vtjmn being scaled, 
and the advantage of leaving s^x*pe t^^ aiixiffy the begifjgers, 
produce^l the mixmivH battlernent^'/i towers and castles of the 
an/rient l/dwita. An its m^Uirmh were the most durable, 
f/rinciples to which we Imve already a/lverted, soon le<^i to itij 
H\)i)\k^iioii U) HtmcintdH devot^^i t/.» the purposes of religi/>n. 

A plain wall of small HUnniH and lime may cjmway tlie idea 
of durability, but only in a slight (li^taa, tltat of power or 
d^^cign. A circular or aumihir column of the sar/ie umUin&h, 
if very hlfivaUA, is betU;r fitte^l for th^jse ends, but still, i« far 
inferior U> one </>ui\)()'i¥A of a s<4id block. A lofty stone arch, 
again, is one of the rn^/st striking displays of power tliat human 
i-rt exhibits. The asp^jct of a mass so ponderous, lianging 
hus s<'/Mirely in high air, fixes the attenti/>n, and fills the 
n/ind with awe. It is, accordingly, by a skilful nianagement 
of the arch, that the grandeur of effVjrjt of what we triitn the 
Gothic iir<^^aU'AiiXYh, in chiefly pr^xiuc^d. All the othw part* 
are 8ulx/rdinate to it, and confined within the smallest limit* 
sufficient t^.> l/ring out its fx^wers. In the more perfect 
specimens, th^^e ia no deafi wall ; a c^>ngeri<:« of lofty arche«, 
supported on short, or slender pillars, i« wrought into a 
wfi'^niiic/mt and l>eautiful whole. The feeling of a^lmiration 
f/ere springs from the c^>nijideration of the power manifV^nted, 
i n ruaintaining in it* place the whoh:; high and lianging fiaMc ; 
whereas, in the Gtecian archit^^jture, it rather ari*fjs from a 
]><',i<M\>t\<)ii of that diHiAaytA in the formation and elevation of 
';Jieh separate member. 

The progress toward* perfection, ':■ .. ./O':; oi 'o.i';SnUn:^Uji% 



170 INVENTION ECONOMIC 

was much more slow, considering that it scarcely ever re- 
mained wholly stationary, than was that of the Grecian, for it 
is, in reality, far more difficult. Several causes contributed to 
its advance. The great extent of country over which its 
elements were diffused, ' occasioned the use of various sorts 
of stone, and produced the advantageous effects arising from a 
continual change of materials. The art of the mason im- 
proved, strength was obtained by joining stones into one 
another, rather than by cementing them together. The use of 
freestone, a rock easily wrought into shape, probably had con- 
siderable effect in producing this improvement. The architect 
was thus enabled to bring out, in greater fineness, all the parts 
of his fabric. The feelings of men, also, set towards the 
pursuit. Kings, nobles, a proud and powerful priesthood, 
stood ready to reward and applaud its successful creations, and 
assembled multitudes gazed on them in silent and delighted 
admiration. It has been truly said, that it formed much of 
the poetry of the age. In the want of other species of intel- 
lectual excitement, men were needs very strongly moved by 
an art, that thus wrought on stone and lime, they knew not 
how, to pourtray some of the deepest feelings of their hearts. 
It seems to have been only slightly retarded, by a propensity 
to servile imitation. The various kingdoms into which Europe 
was split, and the difficulty of intercourse amongst them, gave 
courage to the artists, who were themselves the greatest 
travellers, to attempt works from which they would have 
shrunk, had those who were to judge of them had easy access 
to established models. Nevertheless, there is a fact, which 
shows that the oppressive intluence of this principle was far 
from inert. The epochs of the most rapid advances of the 
Gothic architecture, were the periods succeeding the conquest 
of kingdoms by new races. This circumstance has given 
occasion to several, to conjecture that it stands indebted to 
the knowledge of its principles which some of these conquerors 
brought with them. The supposition is improbable ; we have 
no reason to believe that they brought any thing else, than 
what necessarily belonged to such men, a bold and untram- 
meled spirit. This, indeed, is an essential element, and one, 
as we have seen, of great power in the composition of genius. 



INVENTION ECONOMIC 171 

It was thus that the prominent defects of the art under the 
Anglo-Saxons, an exuberance of dead wall, and want of eleva- 
tion, were remedied by the Normans. The Saracens in Spain, 
wrought also a similar change. 

At no preceding period, did there exist men, so much given 
to the erection of permanent structures as modern Europeans, 
and their American descendants. Their command of materials, 
their resources of power, are by much superior to those 
possessed by any antecedent people. It is certainly, then, 
surprising, that they should be servile copyists of the arts of 
those whom they fitly look on, compared with themselves, as 
barbarians. I apprehend we can only explain the phenomenon, 
from the influence of the instinct of imitation. The extended 
intercourse between all parts of the world, the diffusion of the 
products of book-making, and of picture-making, render us 
familiar with existing models of all sorts. An artist, there- 
fore, who has to construct any great edifice, finds it safest to 
copy from some one whose merits have been acknowledged, 
and takes the measure of a Grecian temple, or Gothic church. 
Thus, at least, he covers himself from censure. Hence it is, 
that we so often see, in the cold foggy climate of Britain, or in 
the boisterous one of North America, an imitation of some 
structure that had been admired in Greece. The claims to 
admiration which the copy possesses, fall, however, far short of 
the original. In the first place, it wants that evidence of 
perfect design, which arises from the complete and easy 
accomplishment of a purpose. What answered the mild 
climate, and serene skies of Greece, is felt to be inconvenient, 
and therefore defective, elsewhere. Next, it is most probably 
a very deficient copy. The effect of the Grecian structures, 
depends, as we have seen, in their consisting of large masses of 
stone. Our imitations are probably the work of the mason, or 
possibly the plasterer, and convey, therefore, no idea of power, 
the very essence which it is desired to embody. There is 
hence, also, generally, a failure in the execution. When the 
mind is full of any great idea, it knows when it has got an 
adequate expression for it, and rests not satisfied until it has 
fitly and accurately embodied it. But, if this great presiding 
idea be wanting, there is nothing within, distinguishing the 



172 INVENTION ECONOMIC 

right from the wrong, or preventing the commission of the 
greatest errors. Our mason-work and plastered fabrics, are 
consequently, often masses of incongruities. 

Our choice of Gothic models, for similar reasons, generally 
fails as completely. A large cathedral, indeed, must be ad- 
mired anywhere, but this is too great a work to be attempted. 
A copy is probably taken, from some chapel. We forget, that 
what was admirable for its purpose in some small ancient 
rustic hamlet, is out of place in our cities ; that the arches, 
which, to simple peasants living in huts, seemed magnificent, 
to the chieftain, issuing for a time from his naked fortalice, 
elegant, must appear mean and insignificant, to those whose 
halls are nearly as lofty ; and, that the whole pinnacled and 
buttressed structure, crowded on and perhaps overtopped by 
square unseemly buildings, devoted to meaner uses, shows 
among them, trifling, and fantastic, like a toy erected to please 
children. 

The examples we have hitherto considered, are of the same 
arts changing materials. Those which we have now to attend 
to, are of different arts adopting the same, or similar materials. 
When arts are brought together, they borrow from each other. 
Men perceive that some materials, or instruments, or processes, 
employed in the one, could they be transferred to the other, 
would be the cause of its yielding larger returns. They are 
encouraged, therefore, to attempt the change, and experience 
shows that such attempts perseveringly pursued, are generally 
successful. 

Efforts of the inventive faculty, succeeding in effecting such 
transfers, are more important than those in which it accom- 
plishes simply a change of materials, for they tend more than 
they to weaken the powers of the propensity to imitation, and 
establish general principles, applicable to all arts. Hence we 
observe, that, in countries where many arts flourish, there are 
most general principles, least servile imitations, and very often, 
a continual onward progress. Barren apart, they show genera- 
tive virtues when brought together. I take it, that it is 
chiefly from this circumstance, that the seats of commerce 
have been so generally the points from whence improvements 
in the arts have emanated. Thus, also, countries where various 



INVENTION ECONOMIC 173 

different races, or nations, have mingled together, are to be 
noted as coming eminently forward in the career of industry. 
Great Britain is a remarkable instance of this ; so are the 
United States of America. When individuals meet from 
different countries, they reciprocally communicate and receive 
the arts of each, adopt such as are suited to their new circum- 
stances, and probably improve several. Servile imitation can 
there have no place, for there is no common standard to 
imitate. Countries again, where only one art is practised, and 
where the population is composed of one unmingled race, are 
generally servilely imitative. Such are some purely agricul- 
tural countries. Experience shows, that, from the influence of 
this propensity, improvements, in these, always introduce 
themselves very slowly. Leaving, however, these general 
reflections, we should now turn to particular instances of 
passages in this way, of processes and inventions from art 
to art, and consequent improvement of old, and generation of 
new arts. But, as these will be chiefly recent, and European, 
there are one or two circumstances, affecting generally their 
progress in this part of the globe, to which it may be as well 
previously to advert. 

The rough and variable climate of Europe, compared with 
the regions that have given origin to most of the arts now pre- 
vailing in it, renders the necessary cost of subsistence much 
greater. To live at all, in most parts of Europe, men must 
■consume a greater quantity and better quality of food, or they 
must be more warmly clothed and comfortably lodged, than in 
regions nearer the equator. The influence of this circum- 
stance has probably been somewhat increased by another. 
Along the Mediterranean, civilization seems to have gained 
great part of its advance by colonization, and it is to be ob- 
served that this movement of men from one region to another, 
proceeds from different motives than others impelling them to 
a change of seat. Men are often compelled by necessity to 
migrate in tribes and nations, but emigration in small parties, 
proceeds from choice. 

They cannot well be induced to leave, not only their homes, 
but their kindred and nation, unless from the hope of bettering 
their condition, and, if their project miscarries not, they do in 



174 INVENTION ECONOMIC 

fact better their condition, and are indemnified for the pains of 
emigration, by a greater command of the necessaries and com- 
forts of life. Thus habits of larger consumption are introduced, 
than absolute necessity might demand. Both circumstances 
would have the effect of augmenting the expense, or the wages 
of labor, and of creating an additional difficulty, to the passage 
of the arts of warmer climates into these more northern 
regions. It is very evident, for example, that an European 
workman could never have sat down to a Hindoo loom, for the 
purpose of fabricating a garment to himself ; it would have 
been much better for him to keep to his sheepskin jacket. 
Before the transfer of any art could be effected, invention had 
to supply it with additional facilities. Stimulated by its 
wants, by the new scenes in which it found itself, and by the 
new materials submitted to it, it accordingly seems always to 
have succeeded in doing so. There is, perhaps, scarcely an 
implement in general use in Africa, or in Asia, excepting from 
it China, that has not passed with improvement into Europe. 

In modern Europe, too, the strength of the effective desire of 
accumulation, seems to have been always greater than in any 
other part of the old world. This circumstance has much 
facilitated the passage into it, of the several arts, and balancing 
the higher rates of wages, and more stubborn materials, has 
rendered the formation of very many instruments there practi- 
cable, which the weaker accumulative principle of the Asiatics, 
or Africans, would have left unattempted. 

It is worth while to remark, that there is a considerable 
analogy in this particular, between the different conditions of 
society in that continent and Asia then, and what exists 
between them now, in Europe and North America. The 
general wages of labor seem always to have been higher in 
Europe, than in Asia, in the same way as the wages of labor in 
North America, are now higher than in Europe. The same 
process, too, that carried the arts to Europe, seems now aiding 
their passage across the Atlantic. As tiame often sets against 
the wind, for that it is fed by it, so invention seems to hold its 
course against opposing obstacles, for these obstacles excite its 
powers and minister materials to their action. 

The progress of the knowledge of the natures and qualities 



INVENTION ECONOMIC 175 

of particular substances, gradually introduced a knowledge of 
the properties and natures of substances in general. Men first 
see in the concrete, afterwards in tlie abstract. Thus, the dis- 
covery of the several mechanical powers, and the knowledge 
acquired of the nature of each, led in time to the general prin- 
ciples of mechanics. A knowledge of the mathematical pro- 
perties of substances, as in land-measuring, and in the regular 
figures of architecture, led to a perception of the general 
properties of figure, or of space as an affection of matter, and, 
at last, to the doctrine of pure space and motion. 

In the ancient world, science, as founded on a generalization 
of the experiences of art, was little prosecuted. It is only 
in modern times, that the science of experience has come to 
form an element of importance, in the general advance of 
invention. 

It is clearly on the antecedent progress of art, that the foun- 
dation of the hopes of Bacon, for the future progress of science, 
rested. His philosophy may be fitly described, as a plan to 
reduce to method the chance processes that had been going on 
before, by which men, as we have seen, happening on one dis- 
covery after another, grope their way, as he expresses it, .slowly, 
and in the dark, to fresh knowledge and power. The progress 
of the philosophy to which he has given his name, as well as 
that of the science of mathematics, have unquestionably dis- 
covered to us many general truths and theorems of art, and 
form therefore a new element influencing its progress. The 
great moving powers will, however, still, I apprehend, be found 
to proceed from the principles, the action of which we are 
now to attempt farther to trace through particular instances. 

Men must have been very early led to the use of some of 
the farinaceous plants, and other vegetable matters, which, 
before they are fit for food, require to be reduced to small 
fragments. To effect this, they must either have rubbed them, 
or beat them, between some two substances. If stone were 
the material, they would rather prefer rubbing them, from the 
liability of that substance to break, and from its weight. It is 
thus that the rude tribes of southern Africa, to this day, lay 
their corn on one flat stone, and grind it by the help of 



170 INVENTION ECONOMIC 

another.^ An improvement on this instrument, is to have the 
lower stone a little hollowed, and perhaps marked with trans- 
verse notches. In one form or other, this is a very general 
and ancient instrument, and, it may be observed, is probably 
the first machine in which a circular motion was introduced. 

If wood be the material, then, to produce any effect, the 
substance to be comminuted must be laid on one piece, and 
another be struck against it. But thus, a large portion of the 
matter operated on would fly off, and be lost. The most 
natural mode of preventing this, is to hollow out the lower 
piece. The Indians of North America make an instrument of 
this sort very easily, by taking a portion of the trunk of a tree 
of hard wood, setting it upright, and burning and scraping out 
a hole in the upper end. They have then a large mortar, to 
wliich adjusting a wooden pestle, they produce the implement 
with which they pound all their corn. Such an instrument 
seems, like its fellow of stone, to have been in very general use, 
at one time or other, in most parts of the world.- 

Tribes having learnt the use of such an instrument, on sub- 
stances most easily comminuted, would be urged on to essay 
its powers on more cohesive matters. They might succeed in 
the attempt, at first, by simply increasing the size of the im- 
plement, and searching out the hardest and heaviest woods to 
construct it of; but, even these improvements would at length 
be insutlicient for the enterprises to which their confidence in 

^ [So also peoples by no means altogether "lude," in Central and South 
America.] 

-In a Scotch ballad, I believe in Allan Ramsay's collection, containing a 
catalogue of a peasant's furniture, perhaps two centuries since, "A tinimer 
mell the bear to knock," is among the utensils enumerated. We yet speak of 
striking barley. 

[The early frontiersmen of America, in the days of their extreme poverty 
before they set up water mills, adopted the Indian mortar and pestle described 
above, with the addition that the labor of raising the heavy pestle was greatlj" 
lightened by the attachment of a spring-pole. These were called ' ' samping 
mills," and the loud noise made by their operation could be heard a long way 
through the forest, and announced to the traveller his approach to a clearing. 

The introduction of water mills into many parts of the tropics is permanently 
opposed by great obstacles, owing to the extreme seasonal variations in rain- 
fall. The device just described would seem to be the first and most natural 
advance upon tlie tortilla stone in these regions.] 



INVENTION ECONOMIC 177 

their powers, or their necessities, might excite them. To over- 
come these increasing difficulties, it would require no great 
stretch of the inventive faculty, to hit on the expedient of 
placing a firm transverse bar, with a hole in it, for the passage 
of the handle of the pestle, across the top of the mortar, from 
side to side. Such a change in its construction, seems accord- 
ingly, to have been very generally effected. Simple as it is, 
it contained the germ of very many subsequent improvements. 
The force employed, acting thus not directly, but through the 
intervention of a fulcrum, may be so applied as to give either 
increased velocity, or increased power, and the regulated move- 
ment introduced renders mere power almost all that is neces- 
sary. The size of the mortar, and weight of the pestle, might, 
therefore, be increased indefinitely, and the instrument might 
be put in motion by men, or by cattle. The expression of the 
vegetable oils, was found to be the most difficult operation to 
be performed by instruments of this sort, and it is probable, 
that it was to effect it, that machinery, by which increased 
, force might be employed, was first made use of. Oil mills, of 
this sort, are yet common in the east. 

This construction rendered the union of the wooden mortar 
and pestle, with the parallel instrument of stone, almost 
inevitable. Hardness and heaviness, being the requisites in 
the pestle, and an equal resistance being necessary in the 
mortar, to bring about the junction, it would seem to have 
been only requisite, that the two machines should have met 
where there was a scarcity of wood of proper quality. The 
handle of the pestle, through which a cross bar was then 
thrust, became the axle of the upper mill stone, and the lower 
mill stone formed the bottom of the mortar. The movement 
then became altogether circular, and required small absolute 
force, but as much swiftness as could be given to it. The 
machine thus generated, by the passage of the one instrument 
into the other, was then a regular mill, to work which was the 
employment of cattle or slaves. As it united the advantages 
of the two original instruments, the capacity of the wood to 
receive and modify motion, and of the stone to bruise and 
comminute hard vegetable matters, its invention seems to have 
had considerable effect in advancing art still farther. The 

M 



178 INVENTION ECONOMIC 

moving power, in one of the most laborious and common opera- 
tions, was thus reduced to a simplicity of action, that paved 
the way for its being performed by an inanimate agent ; such 
an agent was introduced into the process, through the inter- 
vention of another art. 

In hot regions, water is very abundantly consumed, both as 
a necessity and luxury, for immediate use, and as the great 
fertiliser of the soil. In such regions, the raising it from wells 
and rivers has always been a very common and laborious pro- 
cess, and to facilitate it has given occasion to some of the 
earliest efforts of ingenuity. One of these consisted of a large 
wheel, placed upright, and to the circumference of which small 
buckets were affixed. It was put in motion by treading on it, 
and the buckets and it were so arranged, that they should 
just dip beneath the stream, in the lower part of their circum- 
volution, and, at the height of it, should empty themselves 
into a reservoir placed above. A considerable saving of labor 
was thus produced. Another improvement did entirely away 
with the necessity of employing it, in many situations. To,. 
the outside of the wheel, where there was a sufficient current, 
were affixed broad plates of wood, or other material, on which 
the strength of the stream acting, forced it round, and per- 
formed the office of the laborer. Such engines are of common 
use at present in China. They were known in Italy, in the 
time of Julius Ciesar, to which they probably found their way 
from Asia. They presented to the Eomans a means of em- 
ploying the power of water in the laborious operation of grind- 
ing,^ which they had sufficient discernment to adopt. The 
motion of the water-wheel, was communicated to the mill, by 
the intervention of a toothed wheel. 

^ Fiunt etiam in fluruinibus rotte eisdem ratioiiibus, quibus supra scriptum 
est. Circa eaium frontes affiguntur pinna?, qua? cum percutiuntur ab impetu 
fluminis, cogunt progredientes versari rotam ; et ita niodiolis aquani haurientes 
et in summum referentes, sine operarum caloatura, ipsius fluminis impulsa 
versata?, prrestant quod opus est, ad usuni. Eadeni ratione etiam versantur 
hydraulse, in quibus eadem sunt omnia, prreterquam quod in uno capite axis 
habet tympanum dentatum et inclusum ; id autem ad perpendiculum colloca- 
tum in cultrum, versatur cum rota pariter. Secundum id tympanum, majus 
item dentatum planum est coUocatum, quo continetur axis, habens in sunimo 
capite subscudem ferreum qua mola continetur. Ita dentes ejus tympani, 



INVENTION ECONOMIC 179 

Thus, from the union of the productions of the inventive 
faculty exercised on at least three arts, came the rude model 
of the present water-mill. Its progress was at first slow. 
Such mills seem only to have been constructed, when there 
was a current of water suited to the purpose. The expense of 
forming artificial falls, seems to have been too great for the 
improvidence of the age. Though abundant materials existed, 
the accumulative principle of the people was too weak to work 
upon them. Cattle-mills, and mills driven by slaves, con- 
tinued therefore to be generally preferred.^ It was owing to 
an invention, like so many others, the result of necessity and 
genius united, that the use of water-mills became more general. 
When Eome was besieged by the Goths, in the time of 
Belisarius, they cut off the supply of water by the aqueducts. 
Among the other inconveniences arising from the measure, it 
stopped the mills driven by the water from these aqueducts. 
To remedy the evil, that general devised the scheme of 
anchoring barges in the river, in which he placed mills driven 
by the current. The plan met the immediate exigence, and, 
as such a construction suited the low strength of the accumu- 
lative principle of the age, it was generally adopted elsewhere. 
In the present times, such a plan would be rejected, because, 
though the first expense is comparatively small, the durability 
of the instrument is too short. We prefer the greater expense 
of making dams and sluices, on account of their greater dura- 
bility. The cause leading to the construction of the one or 
the other, is the same as that determining the Chinese to the 
formation of floating gardens, where the Dutch would build 
dykes. 

The invention maintained itself through the dark ages, and 
followed the improvement and extension of agriculture, and 

quod est in axi inclusum, impellendo dentes tympani plani, cogunt fieri m6- 
larum circinationem, in qua machina impendens infundibulum subministrat 
molis frumentum, et eadem versatione subijitur farina. — Vitruvius, Lib. X. c. 
10, as quoted by Beckman, Vol. I. 

Si aquae copia est, fusurus balnearum debent pistrina suscipere ; ut ubi 
formatis aquariis molis, sine animalium vel hominum labore, frumenta fran- 
gantur. — Pallad de re rust., lib. I. 42, edit. Gesn. II., p. 892. — Ihid. 

^ Three hundred years after Augustus, the number of cattle-mills in Rome 
amounted to three hundred. — Bbckman. 



180 INVENTION ECONOMIC 

facility of communication, which returning civilization and 
tranquillity gradually diffused. It seems to have spread very 
generally over Europe, about the beginning of the sixteenth 
century. The force of water being, by it, turned to the ser- 
vice of man, wind also was made to employ its powers to a 
similar purpose. 

Important as these engines were in themselves, from their 
immediate utility, they were more so in their effects. Men's 
minds were directed to the advantage of what is termed 
machinery, instruments, that is, giving new velocity and direc- 
tion to motion, and to the power of inanimate agents generative 
of motion, of both of which the mill afforded the first eminent 
instance. Examples of the possibility of executing by other 
powers than the human hand, or the strength of the inferior 
animals, one of the most difficult of the operations that the 
necessities of mankind called for, being brought freshly before 
the eyes of almost all Europe, naturally prompted the genius 
of reflective men to conceive the idea of applying them 
to other, and even more difficult processes. This general 
stimulus to the inventive faculty, conjoined with others, acting 
vigorously, but occasionally and partially, and already referred 
to, carried the improvement through a great variety of opera- 
tions. Mills of all sorts, came to be constructed, driven 
commonly by water, as the more forcible, and manageable 
power. To trace the course of invention through these, were 
not to mark the principles regulating the progress of that 
faculty, but to enter on a description of European art. It may 
be sufficient to observe, that, in conformity to these principles, 
not only was each difficulty overcome by it, a benefit to the 
particular art it was meant to serve, but to art in general, each 
conquest extending its authority, not alone over the province 
where it was achieved, but over the whole region which it was 
its object to gain. If, for instance, comparing the ingenious 
and complete machinery of a well-constructed flour-mill of the 
present day, with a model of the rude and imperfect engines of 
the sort that existed two hundred years ago, we ask the cause 
of the difference, we shall probably be told, the improvement 
of mechanics ; but, if we trace the progress of this improve- 
ment carefully, we will find that it was the fitting of the 



INVENTION ECONOMIC 181 

machinery of this very engine to other arts, that was one of the 
main producers of it. The productions of the union of arts 
also propagating others, like all generators, their increase goes 
on, when there are no retarding checks, to borrow a phrase 
of common use in inquiries connected with these, not in a 
simple arithmetical, but in a geometrical progression. 

The effects produced, by the passage through different 
arts, of this improvement on a very ancient engine, important 
as they were, have been far exceeded in extent of consequences, 
by one of altogether modern invention. I allude to the steam 
engine, the progress of which, we will find to have regulated 
itself almost altogether according to the above principles. 

As the progress of order, civilization, and art, covered the 
island of Great Britain with a numerous population, the stores 
of fuel which its cold and moist climate required, and its 
forests had at first afforded, were by degrees exhausted. Its 
situation prevented its receiving the supplies, which, had it 
made a part of the continent, might have been brought down 
rivers issuing from interior regions. Necessity thus taught its 
inhabitants the general use of coal, in which, happily, its 
territory abounds. But what of this material lay close to the 
surface, and the fields immediately beneath, having been 
wrought out, the miner was urged on by the increasing wants 
of his countrymen, and the abundant materials before him, to 
penetrate still deeper; and the labors of generations formed 
large excavations, in regions far beneath the surface. Here, 
^^owever, he was met by an enemy continually gathering 
^n^ength as he advanced on him, and threatening completely 
to^^ ar his future progress. The farther he penetrated, water 
poured in upon him in greater quantity, while to free himself 
of it he had to elevate it to a greater height. A period seemed 
approaching, when very many of the mines must be abandoned. 
In this extremity, it was natural to the men engaged in this 
occupation, to cast about, and endeavor to discover some 
device, through help of which they might successfully continue 
its pursuit. The resources of all powers hitherto known having 
been tried, as far as in such situations they could be effectually 
employed, and seeming to be on the point of yielding, it could 
not but occur to attentive thinkers, that, if they were to 



182 INVENTION ECONOMIC 

succeed, the probability was it would be through some one 
hitherto unemployed. Of those, steam was perhaps the most 
apparent, and manageable. Its force must have been, at least 
in some measure, known to many, and had been previously 
pointed out by one distinguished individual, as capable of pro- 
ducing the greatest effects. The operation to be performed by 
it, too, seemed peculiarly fitted for its action. Water is moved 
in pipes, and, it is only in confinement that the power arising 
from the rarefication and condensation of steam becomes sen- 
sible. It appeared then by no means impracticable, to manage 
the condensation and rarification within metal pipes, so con- 
nected with those in which the water had to be raised, as to 
supply the force necessary to produce its elevation. On this 
principle the attempt was made, and succeeded in first practi- 
cally establishing the power of an agent, destined, we cannot 
doubt, to produce effects far greater than any which has 
hitherto been placed within the hands of man. 

The various circumstances conjoining to bring about this 
important event, are deserving our attention. 1st. The urgent 
demand for some powerful agent, however rude and unwieldly 
in action. Had the operation to be performed been in any 
degree complicated and nice in its nature, it would never pro- 
bably have occurred to any one, that the expanse and collapse 
of a vapor, shut up in iron vessels, could be brought to execute 
it. 2d. The materials, metal, coal, and water, being in these 
situations abundant. 3d. The previous improvement of 
machinery in general. 4th. The want occurring to men ^ 
property, and of a class in general bold in enterprise, r"^d 
accustomed to stake their funds freely.^ Had any of * 3se 
been wanting, this extraordinary invention might yet-^iave 
slumbered, veiled in the darkness which had covered it for so 
many thousands of years. Perhaps it might have been stifled 

^ [To this catalogue should be added a fifth " circumstance," touched upon in 
part by Rae two pages back, and that is, the existence of a government strong 
enough to secure at least ordinary law and order, but not so strong as to crush 
out the spirit of individual initiative. Had the experience of Dud Dudley in iron 
smelting, for example, been universal and continuous in respect to all British 
industrial innovators in each generation, the whole course of modern economic 
history in Great Britain would have been vastly dififerent.] 



INVENTION ECONOMIC 183 

at its- birth, for its first appearance gave but slight token of its 
inherent capabilities. The expenditure of fuel and of labor, 
necessary to the discharge of its functions, was excessive. It 
having, however, been thus established, that it was an agent 
within the compass of man's ability, to make a partner in the 
series of his operations, there was a strong stimulus to endea- 
vour to render it a more economical agent. This was effected 
by a change in the construction of the apparatus, the leading 
feature of which is, the causing the steam to perform its 
operations, through the intervention of a piston. The instru- 
ment thus produced, was an effective and economical operator 
for the purpose designed. The improvement was important in 
itself, and far more so in its consequences. Had the machinery 
of simple pipes and valves been continued, under some improved 
form,^ it might have appeared only fitted for propelling fluids, 
and been confined to that purpose ; as through the aid of sails 
of some sort, wind has been made to propel vessels, from very 
early ages, though it is only of comparatively recent times, that 
it has been applied to give motion to mills. But, the introduc- 
tion of the piston, and its adjuncts, showed the power in a 
familiar form ; the handle of a pump was a thing well known 
as put in motion by machinery, and it was obvious that the 
movement had only to be reversed, to communicate motion to 
any machinery. Under this form, therefore, its progress as a 
power through all other machinery, may be said to have been 
inevitable. It possessed the important advantages of being 
always at command, uniform in action, and unbounded in force. 
In this progress it was assisted in one important step by science. 
The discovery of the doctrine of latent heat enabled it at 
once to surmount a great obstacle, which might otherwise 
have long limited the extent of its operations. It is perhaps 
not to be supposed, but that the general truth would have 
been itself at last made known by the continual groping 
after improvement, which the existence of such an instrument 
in the hands of men would of itself have occasioned ; if how- 
ever science advanced it by only a few years, the beneficial 

■^ The formation and condensation of the steam, might have been managed 
in chambers, separate from the system of pipes and reservoirs elevating the 
-water. 



184 INVENTION ECONOMIC 

effects of such au anticipation, will be allowed to have been 
very great. ^ 

In its course, two things seem specially worthy of notice, the 
additional freedom which it gave the inventive faculty, and the 
circumstances which existed to facilitate the progress of that 
faculty, and which it seized on for the purpose. The con- 
sciousness of the possession of an agent of unlimited and 
perfectly manageable power, which had escaped the attention 
of all preceding ages, seemed to have immediately more 
effectually broken the constraining and retarding influence of 
the propensity to imitation, than any preceding event. What- 
ever mere motion could do, if the sphere of its action could be 
contracted into small space, was conceived within the power of 
steam ; and invention set to work with a determination, pro- 
gressively to supply the means of its application. In these 
essays, it has been always ultimately successful. It is not 
necessary here to enlarge on the great changes it has hence 
effected, or on the important improvements it has introduced. 
It is to be observed, however, that, whatever it has performed, 
has proceeded in the order we have indicated, and which, I 
believe, almost all inventions have followed. The diversity of 
climates, territories, productions, and other circumstances of 
different regions and nations, has helped it, as them, forward, 
and been to it as it were steps, by which it has gained the 
rank it holds in the modes of human industry. 

Thus the peculiar circumstances of the North American con- 
tinent, may, with propriety, be said to have been the exciting 
cause producing steam navigation, one of the most important of 
these steps. That country is full of great lakes and rivers,. 
affording the easiest, and often the only means for the trans- 
port of the large quantities of agricultural produce, that its 
interior sections yield. Such inland navigation is always 
exceedingly tedious ; there were therefore peculiar reasons 
for the device of some new agent to facilitate it. An agent 
like steam, too, might evidently be employed with more safety 
and chance of success, in calm inland waters, than in the great 

^ Since the above was -written, I have seen it stated, that Watt did not 
take the idea of his great improvement from Dr. Black's discovery, but that it 
was entirely the result of his own inventive powers. 



INVENTION ECONOMIC 185. 

ocean. If we consider, in addition to this, the greater plaj 
which, from circumstances already enumerated, the inventive 
faculty enjoys in that continent, we shall see that it was there, 
so to say, that this improvement ought to have taken place. 
The point, too, in North America, where it did first actually 
take place, is also, as it were, particularly marked out for it. 
The transport between New York and Albany, by sailing- 
vessels on the Hudson river, was both very expensive, and 
peculiarly tedious. Steam has there changed a voyage of days, 
or weeks, into one of less than sixteen hours.^ 

The circumstances leading on to the invention of steam land 
carriage, may also be noted as exemplative of this view of the 
subject. There were first simply railroads, to facilitate heavy 
drafts for short distances, from coal mines ; then there was a 
more general use of them in all heavy drafts ; finally, there 
was the general application of steam, as the power to effect 
transport of all sorts, and with all velocities, along the smooth 
surface they afforded. All that was wanted for the last step 
was, that the mechanism should be rendered less heavy and 
cumbersome, and it may be remarked, so great confidence had 
been generated of the power of the inventive faculty, that the 
undertaking was commenced with full assurance that it would 
accomplish the desired improvement, although the manner how 
was not known. The result showed that the confidence was. 
not misplaced. 

Thus, such are the steps by which invention advances, that 
it would seem, had there been no country like Great Britain,, 
the steam engine might not yet have been produced ; had 
there been none like North America, steam navigation might 
not yet have been practised : and again, had not Great Britain 
existed, metal railways and steam carriage might have beea 
still only in the category of possibilities. 



^ Since the passage in the text was written, the art of the application of 
steam, as an agent in transport by water, has made a farther step. It con- 
sists in a passage of the engine used in land carriage, to that used in water 
carriage. Besides this, however, the germ of some other principles has 
appeared, which, it seems probable, will ultimately produce a great and 
important revolution in the art. It is remarkable, that the site of this event 
is also the Hudson. 



186 INVENTION ECONOMIC 

The invention of printing has often been cited as one of the 
most important of modern times. The steps by which it 
advanced were also of that gradual and easy nature, one leading 
on to another, and surrounding circumstances prompting to 
essay the ascent, as to take away all admiration of its 
progress, were it not that the constitution of man's nature 
renders the passing of any individual, coolly and deliberately, 
the least out of the circle of imitation, very often a proof of 
the strongest powers of mind. There was first the stamping 
with signets ; then the transfer of this initial art, to stamping, 
instead of painting, playing cards ; then the existence of a 
great and unceasing demand for one book, the Bible, the 
excessive cost of transcription, and the transfer of the art of 
stamping cards to stamping pages, first of the sacred volume, 
and afterwards of others ; lastly, there was the passage of 
another art, that of casting dies for coining, to facilitating the 
formation of metallic types.^ The art, thus perfected, was dis- 
seminated by the tyranny of a petty prince.^ 

The art which [while not itself a technical process] has most 
immediate connexion with the increase of wealth [in general], 
the business of banking, is itself in some measure illustrative 
of the influence of change in producing improvements in all 
arts. It commenced in countries where exchanges for large 
amounts were numerous. Venice, Florence, Genoa, Amsterdam, 
the great marts of commerce, were the first banking communi- 
ties. In them, however, its operations were confined to 

^ In ascribing the invention of printing not to chance, but to the gradual 
progress of events, I am supported by the authority of Condorcet, and appa- 
rently also by that of Dugald Stewart. " L'invention de I'imprimerie a sans 
dout avance le progres de I'esp^ce humaine ; mais cette invention etoit elle- 
meme une suite de I'usage de la lecture rt^pandu dans un grand nombre de 
pays." Vie du Turgot, Pref. to first dissertation to Enc. By-it. 

2 On salt comment I'imprimerie s'est rt^pandue depuis 1462 par la revolution 
que Mayence eprouva cette meme aunee. Adolphe, comte de Nassau, soutenu 
par la Pape Pie II. ayant surpris cette ville imperiale, lui ota ses libert^s et 
privileges. Alors, tous les ouvriers, qu'elle avoit dans son sein h I'exception 
de Guttenburgh s'enfuirent, se disperserent et porterent leur art dans les lieux 
et les pays ou il n'etoit pas connu. C'est a cet t^venement que tous les 
historiers reunis k Jean Schceffer fils de Pierre et petit-fils de Faust, placent 
I'epoque de la dispersion dont I'Europe prolita. {Encydopedie, Art., "Ini- 
primerie.") 



INVENTION ECONOMIC 187 

transfers of specie, and the benefits derived from them con- 
sisted chiefly in security given, and trouble avoided. It 
passed, at last, into countries where there were comparatively 
few actual exchanges, and where, in order to effect the passage,' 
invention was obliged to develope its capacities for facilitating, 
and thus exciting and increasing exchanges. The following 
extract from the Wealth of Nations will render this apparent. 

" The commerce of Scotland, which at present is not very 
great, was still more inconsiderable when the two first banking 
companies were established ; and those companies would have 
had but little trade, had they confined their business to the 
discounting of bills of exchange. They invented, therefore, 
another method of issuing their promissory notes ; by granting 
what they called cash accounts, that is, by giving credit to the 
extent of a certain sum, (two or three thousand pounds for 
example), to any individual who could procure two persons of 
undoubted credit and good landed estate to become surety for 
him, that whatever money should be advanced to him, within 
the sum for which the credit had been given, should be repaid 
upon demand, together with the legal interest. Credits of this 
kind are, I believe, commonly granted by banks and bankers 
in all different parts of the world. But the easy terms upon 
which the Scotch banking companies accept of repayment are, 
so far as I know, peculiar to them, and have perhaps been the 
principal cause, both of the great trade of those companies, and 
of the benefit which the country has received from it." 

If we may judge of the progress of an art from its general 
success, the transfer of the business of banking to Scotland 
would furnish another proof of the benefits accruing to arts 
themselves, from their passages from country to country. No- 
where has banking been productive of more acknowledged 
advantages, [as is shown in another place], and nowhere have 
the evils occasionally attendant on it been fewer. 

As also illustrative of the subject, I may call the attention 
of the reader to a fact often noted, — the small progress of the 
aborigines of the new world in art, when compared with that 
attained by the inhabitants of the old. 

If we are to search for natural causes of the phenomenon, in 
my opinion we may find them, in the greater extent of 



188 INVENTION ECONOMIC 

continent in the eastern than in the western hemisphere, and, 
especially, of continent lying under the equatorial regions, the 
birth place in both of the arts they possessed. This extent of 
country, and diversity of materials, must have increased very 
much the chance of discovery in the arts, and tended greatly, 
on the principles we have just been considering, to push 
forward their improvement. To take as an example an art 
which has been particularly referred to,^ that of domesticating 
the ox, and teaching him labor. To suppose that men, while 
the whole of that species of animals were yet wild, conceived 
the project of domesticating them, in order that they might 
apply them to the various purposes they now serve, were a 
conjecture altogether unwarranted by any event in the history 
of mankind and of art. We have rather reason to believe that 
in this, as in other instances, they must have been led on to 
the object gradually, by the intervention of circumstances, each 
carrying them a certain way towards this great end. But 
there must evidently have been a greater chance for the exist- 
ence of such circumstances, in the great range of continent 
lying within, or not far from, the borders of the torrid zone in 
Asia, Africa, or Europe, than in the small part similarly situated 
in America. Without pretending to say what those circum- 
stances were, it is at least probable that one may have been 
the keeping these animals in enclosures, merely to satisfy the 
curiosity, or to aftbrd the amusement of hunting to the chiefs, 
or kings, of the agricultural nations. This we know, in more 
recent times, to have been a custom in some eastern countries.^ 
There they would in time lose great part of their natural 
ferocity, and become, like deer in our parks, half tame. Now, 
it is evident enough, that the chances for this important step 
towards the accomplishment of the object being undertaken, 
would be directly in proportion to the number and extent of 
the agricultural countries of those ages, that is, to the extent 
of continent lying near the equator. 

The period when the event took place marks a great change 
in the condition of man, for, independently of its immediate 
effects, it necessarily brought about the existence of a race of 
herdsmen, occupying regions, in the state of art at the time, not 

'Dr. Robertson's History of America, Vol. II. ^Xenophon, Cyrop. 






INVENTION ECONOMIC 189 

coming within the range of the strength of the effective desire 
of accumulation of the neighboring people, as tillable land. 
Herdsmen once existing, it could scarce be but that they 
would spread themselves wherever they could find support 
for their cattle, and gradually exterminate the hunting 
tribes. There is, I think, reason to suppose that such a 
revolution occurred in Europe many ages previous to the 
time of recorded history. Its importance may be estimated 
from the observations that are made in a preceding part of 
this volume.^ 

We may, on similar principles, in part, account for the low 
rank in the scale of humanity occupied by the aborigines of 
Australia, that fifth and yet but partially explored continent. 
The uniformity of soil, climate, and natural productions, of that 
whole region is very great. This limited variety of materials 
would seem to have diminished the number of arts generated, 
and that of improvements arising from effects of changes, 
■among those having obtained existence. 

In conclusion I may observe, that I believe it will be found, 
that there is no art in existence which we may not find means 
to trace, with greater or less certainty, to the rudest and most 
simple principles ; and which may not be shown to have 
attained perfection by continual changes from place to place, 
and material to material, and by encountering consequently 
alternate difficulties and facilities, the former developing its 
powers, the latter extending their field of action, and both, 
by helping to introduce general principles, weakening the 
restraining power of the tendency to servile imitation, and 
advancing the progress of science. This successive passage of 
the same arts from country to country, and from one into 
another, seems to be the great exciting cause of the progress of 
them all. The greatest improvement of British manufacture 
in recent times is, I may remark, [the result of] a passage of 

^ Page 84. Were this the place to enlarge on the subject, many circum- 
stances confirmatory of such an event might be enumerated : as the traces of 
the existence of a race of mere hunters over all Europe ; the roots of European 
languages being the same as those of central Asia ; the form and constitution 
of the present domestic ox species, and of sheep, marking their gradual migra- 
tion from a warm climate, into colder regions and more abimdant pasture. 



190 INVENTION ECONOMIC 

this latter sort. The cotton manufacture is a passage of the 
art of fabricating woollens, into that of fabricating cottons. It 
was the perfection of the former more easy art that showed the 
possibility of the existence, and eventually brought about the 
existence of the latter, — invention in this case, being excited 
by the higher wages of labor in Europe than in Asia. 
Improvement was the consequence. The peculiar difficulties 
the material presented being overcome, the facilities it possessed 
were experienced. 

This view of the subject seems somewhat to illustrate the 
following reflections of Lord Bacon, concerning the early 
progress of art, and may satisfy us that, even yet, they are 
not altogether inapplicable. He observes, that, " although, 
when we first begin to consider the variety of necessaries, 
conveniences, and elegances, which the mechanical arts 
minister to life, we are rather struck with a feeling of 
admiration at the abundant wealth which mankind inherit, 
than with a sense of their poverty ; yet, when we examine 
every thing, and consider through how many chances and 
revolutions these arts have been brought to their perfection, 
and through what simple and easy reflections they have been 
discovered, such sentiments will soon leave us, and we shall be 
inclined to commiserate the penury and barrenness of inven- 
tion of the human race, which have taken so many ages to 
accomplish things deducible without difficulty, from facts 
neither very numerous, nor very hard to be ascertained." ^ 
It is indeed true that the philosophy, in the introduction 
of which he bore so eminent a part, has, in these latter ages, 
been a very effective promoter of the dominion of man, and, 
mixing with art, has much purified and dignified its spirit, and 
greatly increased its powers, turning invention in this depart- 
ment from particulars to generals, and converting art into 
science. This has more especially happened in the chemical 
sciences, and those connected with them, a sphere to which, I 
may be allowed to observe, his system seems particularly 
applicable. There, science begins to lead and direct art ; in 
other departments she rather follows and assists it. But, with 
regard to the general progress of art, even its recent history 
^Xov. Org., L. 1, LXXXV. 



INVENTION ECONOMIC 191 

evinces the justice of these observations, and shows that 
" men estimate falsely both their possessions and their powers, 
deeming of the first more highly, and of the last more lightly, 
than they ought." ^ We shall admit this, if we consider the 
vast number of qualities and powers, and of new practical 
combinations of them, that, in our days, have been discovered 
and applied to use, and reflect on the long series of ages 
during which they were hid in darkness, on the proximity 
of men to them, and the ease with which they might have 
lighted on them, would they have turned their eyes, ever so 
little, out of the busy circle of actual life and occupations. If, 
too, the history of the past tell us truly what the future will 
be, we may feel assured that, as it is not the powers of nature 
or of man, but the application of them, that is limited, if indi- 
viduals be inclined by their own dispositions to apply them- 
selves to purposes conducive to the general good, and if they 
be incited to do so by causes similar to such as have before 
operated, art and science will still stretch their capacities, until 
they may at length reach an extent of which it is impossible 
for us now to form any conception. 

An attentive consideration of the history of art might also 
give rise to a series of reflections of another sort. It would 
show a purpose, which does not strike us on a first view of the 
creation. Nature," it would seem, if I may be allowed so 
to express myself, sensible of the combined pride and im- 
becility of man, has so arranged the world she has provided 
for him, as to make it the means of urging him on, in a 
continual progress, towards higher and higher attainments. 
Neither the defects of his limited and cloudy faculties, nor the 
intoxication of the vainglory, that, fed by his imitative propen- 
sities, is ever representing him to himself as having reached 
the summit of terrestrial perfection, can preserve him station- 
ary. He is now impelled by necessity, now excited by hope, 
to attempt the amelioration of his condition, and thus gradu- 
ally to develope the latent capacities of his own being, and of 
the sphere of existence in which he moves. By a diversity of 
climates, soils, and nations, steps are, as it were, arranged for 
him, up which he is gradually enticed, or compelled to mount, 
^Nov. Org., L. 1, LXXXV. 



192 INVENTION ECONOMIC 

to fresh acquisitions of knowledge and power. He is never 
allowed to remain stationary. A portion, indeed, of the race 
may, and for a limited time, but ultimately they either im- 
prove, or yield their place to surrounding peoples who have 
improved. 

Some philosophers urge it as an objection against the 
world's having been formed by a designing cause, that so 
large a portion of its surface is useless to man. According to 
them, had it been formed by perfect and beneficent reason, it 
should have been such a level garden, as a certain theorist 
supposed it originally to have been. Had it been so, we may 
safely assert, that man, as man, could never have inhabited it. 
He must either have been formed above, or sunk below, his 
present condition. Because we do not turn to any account the 
sandy desert, or rugged mountain, we are not entitled to look 
on them as blots on the general utility of the creation, or sup- 
pose, even, that they may not be put to use by succeeding 
generations. The savage of New Holland conceives every tree 
useless that does not soon rot, and so breed maggots for him. 
The ancient Eomans scarcely conceived that the woods and 
morasses of Caledonia would, at any time, be abundantly 
useful. We judge rashly, then, in condemning as useless any 
portion of the earth. Even the barren deserts of Africa may, 
in after ages, be fertilized. Art and industry may, in time, 
draw water plentifully from the depths of the earth, and 
€Over them with treple harvests. To do so, human art 
must make great advances, and these and the other obstacles 
it has met with, and will meet with, are stimulants to its 
advance. 

War itself, so great an evil to the individuals within the 
scope of its ravages, is evidently the only manner by which, in 
certain states of society, an amelioration can be induced. The 
destruction of the Eoman Empire, and almost of the Koman 
race, by the barbarians, was, perhaps, ultimately, the most 
beneficial revolution ever brought about. Even in its minor 
consequences, this apparent evil produces also much of real 
good. Without it, many of the most useful inventions might 
never have been either propagated, or improved. 

We are ever ready to forget the part which nature thus 



I 



INVENTION ECONOMIC 193 

bears in our operations, and to lay the whole credit of our skill 
and industry to our own discernment. The slow and 
gradual manner in which she has led us on to the acquisition 
of every art, acting all along the part of the sagacious teacher, 
who puts before his scholar, at first, the most simple and easy 
lessons, and on his mastering these, by degrees, through the 
influence of suitable rewards and penalties, conducts him to 
more difficult efforts, meets not our notice, and rises not 
to our thoughts. 

Were these or similar reflections fitly placed here, the 
subject might give occasion to many more of the sort. But, 
it seems to me, that we act always rashly and imprudently 
in bringing such disquisitions into inductive inquiries. They 
belong to another subject. 

The aim of science may be said to be, to ascertain the 
manner in which things actually exist. The doing so, indeed, 
has been generally found to bring to light some useful purpose 
in their arrangement, and the proofs of benevolent design 
thus exhibited, are exceedingly interesting in relation to the 
evidence they afford us of the attributes of the great first 
cause. But, as science is only progressive, we are never 
certain of having ascertained the exact manner of the exist- 
ence of any thing, and, therefore, we must often be mistaken 
in the ends for which we may conceive that the things we 
see are formed. The confident assumption, then, that we 
have exactly ascertained, in any case, the precise end, and the 
application of this assumed purpose, as a guide to scientific 
inquiry, has a decided tendency to retard the progress of 
science. For, the supposition that the actual arrangement 
is different from what it was conceived to be, is held to be 
inadmissible, as it would imply some deviation from the 
design for which we assumed it was devised. It is, as Lord 
Bacon expresses it, an improper blending of things human and 
divine, and a mode of reasoning which he, in my opinion, 
with much propriety repeatedly cautions his followers to 
avoid. 

The reflections, therefore, as to the probable designs of 
nature, in the constitution of the world as the abode of man, 
which I have here introduced, would have been excluded, had 

N 



194 INVENTION ECONOMIC 

it not been that Adam Smith, and many other popular writers 
on these subjects, sometimes indirectly, in 'their application 
of terms, sometimes directly, in their reasonings, assume, that 
the designs of nature are quite opposite to what I have repre- 
sented, and make their conceptions of her purposes an argu- 
ment in favor of their particular theoretical views. 
The embryo doctrine is to be found in Virgil. 

"Noiine vides, croceos ut Tmolns odores, 
India mittit ebur, moUes sua thura Saboei ? 
At Chalybes nudi ferrum, virosaque Pontus 
Castorea, Eliadum palmas Epirus equarum ? 
Continuo has leges seternaque foedei'a certis 
Imposuit uatura locis, quo tempore primum 
Deucalion vacuum lapides jactavit in orbem." 

"Thus Tmolus is with yellow saffron crowned; 
India black ebon and white ivory bears ; 
And soft Idume weeps her odorous tears. 
Then Pontus sends his beaver stones from far, 
And naked Spaniards temper steel for war : 
Epirus for the Elean chariots, breeds 
(In hopes of palms) a race of running steeds. 
This is the original contract ; these the laws 
Imposed by Nature and by Nature's cause 
On sundry places, when Deucalion hurled 
His mother's entrails on the desert world." ' 

In the same manner as by the poet, the products of different 
regions are spoken of by political economists as bestowed on 
them by nature, are termed natural productions, and the 
attempt to transfer them to other sites, is held to be a pro- 
cedure in opposition to the designs of providence, whose inten- 
tions, it is asserted, in giving them these productions, were, 
that the inhabitants of different countries should exchange the 
products of their several territories with one another. 

There are, I conceive, two objections to this view of the 
subject, the first referring to the term, natural productions ; 
the second to the purposes assumed to be the ends designed by 
nature. 

If by the term, natural productions, we mean things pro- 
duced without the aid of art, then no civilized country can be 

^ Georgic I. Drydeu's Translation. 



INVENTION ECONOMIC 195 

said to have any natural productions, for to all that it pro- 
duces art lends its aid. It were, therefore, I think, better 
to substitute for the term, natural productions, that of actual 
productions. 

But, because one country alone now produces particular 
commodities, we are by no means warranted to conclude that 
nature intended they should be produced only there. On 
the contrary, if we may judge of a scheme by the mode in 
which its parts are arranged, and in which they act, her inten- 
tions were, that the variety of materials placed before man 
should generate the rudiments of arts at different points, but 
that these arts should be advanced from their first rough sim- 
plicity, and carried to greater and greater excellence, by passing 
from one region and people to another. If, therefore, we find 
any art confined to a particular region — the actual production 
of only particular communities, — the presumption is, that it is 
yet in its infancy, and that it will only be as it is carried to 
new countries and other men, and generally diffused over the 
whole globe, that it will advance towards maturity. Time 
has shown that the supposed laws and decrees of nature, which 
the poet declared to be of eternal power, are already abrogated 
by the progress of art, in most of the instances he adduces. 
The natural productions of Great Britain, serviceable to man, 
are certainly very few. The catalogue of her actual produc- 
tions, even of those alone in which she preeminently excels, 
is greater than that of any region of equal extent. Were 
Virgil now alive, he certainly would not cite Albania for 
horses, or Spain for iron. These results are entirely the work 
of art, to the operations of which it is impossible to put any 
bounds. Who can positively say what fifty years hence will 
be the productions of any country ? 

It is the intention of the inventive faculty, when it applies 
itself to the arts of ministering to the necessaries, conveniences, 
or superfluities of life — the wants of our nature that the 
subject we treat of considers, — to increase the supplies which 
it is the aim of each to procure. If when it gains the ends 
it purposes, it really produces this increase, in doing so, it 
must render the labor of the members of the society in which 



196 INVENTION ECONOMIC 

it operates more effective, and enable them from the same 
outlay to produce greater returns, or from less outlay to pro- 
duce the same returns, [or from the same outlay to produce 
the same returns in less time.] An improvement in the con- 
struction of a plough, enables the individual employing that 
instrument to plough a greater quantity of land with the same 
cattle and labor, or an equal quantity of land with fewer cattle 
and less labor. The use of water as a power diminishes very 
greatly the labor necessary to perform the operations in which 
it is employed, and, therefore, from a less outlay, produces 
equal returns. Were the assumption correct, on which we 
have been all along proceeding, that instruments compare with 
each other by the physical effects they produce, and, that, in 
proportion as the same effects result from less outlay, or 
greater effects from the same outlay, the ratio of the capacity 
of the instrument to its cost will Ipe increased, and it moved 
to an order of quicker return ; then the successful exertions of 
the inventive faculty would always be effective, and every 
discovery, directly or indirectly, lead • to real improvement. 
This, as we shall presently see, is not always the case, because 
many commodities are not estimated by their physical effects ; ^ 
but continuing for the present the assumption, which, for the 
sake of simplicity of exposition we have made, improvement, 
in this case, must carry the instruments improved by it to 
more speedily returning orders. 

It is here also to be observed that, although any particular 
improvement, immediately, and at first, affects only the instru- 
ments improved, it very shortly diffuses itself over the whole 
range of instruments owned by the society. The successful 
efforts of the inventive faculty are not a gift to any particular 
artists, but to the whole community, and their benefits [are] 
divided amongst its members. If an improvement, for in- 
stance, in the art of baking bread were effected, by which, 
with half the labor and fuel, equally good bread could be 
produced, it would not benefit the bakers exclusively, but 
would be felt equally over the whole society. The bakers 
would have a small additional profit, the whole society would 

^ [Here Rae refers to his theory of luxury. See Article I. in the 
Appendix.] 



INVENTION ECONOMIC 197 

have bread for the product of somewhat less labor, and all 
who consumed bread, that is, every member of the society, 
would from the same outlay have somewhat larger returns. 
The whole series of instruments owned by the society would 
be somewhat more productive, would be carried to an order of 
quicker return.^ 

In this manner, all improvements, by moving the whole 
stock of instruments belonging to any society, to more pro- 
ductive orders, increase proportionably its absolute capital 
and stock. Should a naturalist, in examining .the nature of 
the surface on the farm of an individual in a small agricul- 
tural society, make the discovery, that beneath it there was a 
quantity of plaster of Paris ; and should the farmer, in conse- 
quence of his recommendation, sprinkling a little of this 
reduced to powder on some of his fields, find that it caused 
them to yield double returns, his farm or the lease he held of 
it, might in his eyes be doubly valuable, and he might demand 
in exchange, and perhaps receive, two other farms of equal 
size in its place. Were it, however, found, that a stratum of 
this substance extended over the whole range of country 
possessed by the society, and was equally efficacious when 
applied to any portion of the surface, his farm would not be 
more valuable than other farms. The supply [provision], 
however, for future wants, possessed by the whole society, 
would be largely increased, and, the strength of their effective 
desire of accumulation remaining undiminished, their absolute 
capital would be proportionably augmented. But, as the 
whole stock of instruments [still] remained the same, with the 
exception of the difference made by the surface of the fields 
having been sprinkled with a quantity of this mineral powder, 
their amount, as measured by one another, [or by some par- 
ticular instrument taken as a standard and to which all other 
instruments are referred (see Chapter VIII.)], would be the 

^ This follows from the nature of exchange, see pages 104-105. 

[What Rae means by this reference to his theory of exchange in the 
eighth chapter, is somewhat obscure. It is, apparently, that the system of 
separation of employments and resulting system of exchange, with its 
phenomena of competition, forms altogether a benefit-of-progress diffusing 
mechanism. ] 



198 INVENTION ECONOMIC 

same as before. Some instruments might possibly exchange 
for a greater amount of instruments of another sort, than 
formerly, but this change could no more be considered an 
increase in the total value, than the fact of the latter instru- 
ment exchanging for a less amount, could be considered an 
indication of a diminution of the total exchangable value of 
the stock of the society. The relative capital and stock would 
thus remain unchanged [for the time being], liut, though 
this relative or exchangable value of tlie society's stock might 
remain unclumged, its absolute capital and stock would be 
[straightway] increased. The reality of such increase is 
marked, in all similar cases, by at least three [attendant] 
circumstances. 

1. The members of the society possess, in general, a more 
abundant provision for future wants, the revenue of the whole 
society, and of each individual composing it, is increased. 

2. The whole society, as a separate connuunity, becomes 
more powerful, in relation to other communities. It can sup- 
port the burdens of war, and the expense of all negotiations 
and national contracts with foreign powers, with greater ease. 
It can also, without inconvenience, execute a greater number 
of useful works and undertakings. The imposts which the 
state levies for such purposes, in a society where the stock of 
instruments is wrought up to an order correspondent to the 
average efiective desire of accumulation of its members, must 
almost always occasion some diminution of that stock. The 
returns coming in from their industry, being only sufficient to 
reconstruct the instruments as they are severally exhausted, 
an additional drain made upon their funds must, in most 
cases, prevent the reconstruction of many of them, and conse- 
quently occasion a disappearance, to that amount, of a portion 
of the general stock. But, when instruments are of more 
productive orders than the elfective desire of accumulation of 
the society demands, the abstraction of a part of their returns 
by the state, to supply its exigencies, only carries them nearer, 
or brings them altogether, to an order corresponding to the 
strength of that desire, and, therefore, interferes not with their 
reconstruction. Taxation [in that case] is paid out of revenue, 
not out of capital. 



INVENTION ECONOMIC 199 

3. As it is the effect of improvement, to carry instruments 
into orders of quicker return than the accumulative principle 
of the society demands, a greater range of materials is brought 
within reach of that principle, and it consequently forms 
[eventually] an additional amount of instruments. The various 
agricultural improvements v^ith which invention enriched that 
art in Britain, towards the conclusion of the last and com- 
mencement of the present century, occasioned a great amount 
of materials to be wrought up, which before lay dormant. 
The construction of the plough in Scotland, and generally 
over the island, was so improved that two horses did the 
work of six oxen. The diminution of outlay thus produced, 
giving the farmer, from a smaller capital, an equal return ; he 
was encouraged and enabled to apply himself to materials, 
which he would otherwise have left, as his forefathers had 
done, untouched. He carried off stones from his fields, built 
fences, dug ditches, formed drains, and constructed roads. — 
Lime was discovered to be a profitable manure. The addi- 
tional returns, which the hard clay thus converted into a 
black loam yielded, were spent in the cultivation of land 
before waste, in levelling and reducing to regularity, the rude 
ridges of antecedent periods. — The culture of turnips was 
introduced ; and instead of useless fallows the farmer had a 
large supply of a nutritive food for his cattle. He erected 
better buildings for the reception of his stock, he improved 
their breed, he transported manure from great distances, he 
had his fields trenched deeply with the spade, fresh soil 
brought up, and all useless or prejudicial matters buried 
beneath. Each succeeding improvement gave a fresh stimulus 
to industry, and brought new materials within the compass 
of the providence of the agriculturist. Nor was this all ; the 
stimulus reacted also on the inhabitants of the towns, and 
their industry was augmented by the increased returns yielded 
by the country, and by the new demands made by it. Im- 
provements, too, in the branches of industry in which they 
were themselves engaged, of at least equal extent, carried 
them forward in a like career. Rocks were quarried ; forests 
were thinned ; lime was burned ; the metal left the mine ; 
large manufacturing establishments arose ; wharfs, docks, 



200 INVENTION ECONOMIC 

canals, and bridges were constructed ; villages were changed 
into towns, and towns into cities. 

It is thus that every improvement animates industry, and, 
though it cannot increase immediately the amount of instru- 
ments possessed by the society, or the sum of the values 
produced by measuring the one with the other, [or all 
relatively to the customary standard], shows that the members 
of the society really estimate them higher than they would 
thus be rated, by their instantly commencing to work up, into 
analogous instruments, inferior or more stubborn materials, or 
by their working up similar materials more laboriously. The 
amount thus wrought up, until the process stops, by the total 
instruments constructed arriving at an order correspondent to 
the effective desire of accumulation of the society, must depend 
entirely on the nature of those materials, and is, therefore, 
always a variable quantity, and one never to be ascertained 
previous to the event. Sometimes a very small improvement 
may put a large range of materials within reach of the ac- 
cumulative principle, sometimes a very considerable improve- 
ment may not enable it to make much addition to the stock 
of instruments before constructed. 

When misfortunes befall the general industry of a community, 
improvements, though they may not add to the national capital, 
prevent or lessen the threatened diminution of it. In agricul- 
ture, the introduction of the drill husbandry for grain crops, 
and the discovery of new manures ; in manufactures and trade, 
the improved construction of steam engines, the discovery of 
railroads, and many other recent improvements, have taken off' 
part of the weight of the heavy burden, that has of late years 
been imposed on the resources of Great Britain. 

The high rate of profit, which, unless when counteracting 
causes intervene, follows [for a time] the introduction of 
improvement, is indicative of an immediate proportional aug- 
mentation of the absolute capital of the society, and produces 
a subsequent addition to its relative capital, the amount of 
which is determined by the additional capacity which the 
materials in possession of the community can receive, and by 
the quantity of materials of the next lower grades owned 
by it. That high rate of profits, again, which arises from 



INVENTION ECONOMIC 201 

a deficiency in the strength of the effective desire of accumula- 
tion, is essentially different. It indicates no increase of the 
absolute capital of the society, no recent increase of the re- 
venue of its members, no greater ability to support public 
burdens, and no approaching increase of relative capital.^ The 
want of a clear perception of this distinction, seems to have 
led Adam Smith, and some other writers, to speak of high 
profits as generally prejudicial. 

In countries where the effective desire of accumulation is 
low, profits are of necessity [permanently] high. Such 
countries, too, from their inability to work up into instru- 
ments the same materials, must always be poorer than their 
neighbors. Hence high profits have been regarded as indicat- 
ing, and producing poverty. This prejudice is one source of 
the errors of Sir Josiah Child on this subject, and it seems to 
have given rise to one or two rather declamatory passages in the 
Wealth of Nations. " Our merchants and master manufacturers 
complain much of the bad effects of high wages in raising the 
price, and thereby lessening the sale of their goods, both at 
home and abroad. They say nothing concerning the bad 
effects of high profits ; they are silent with regard to the 
pernicious effects of their own gains ; they complain only of 
those of other people." ^ Now I apprehend that high profits 
springing from improvement, can never lessen the sale of 

^[It seems to the editor that the application of Rae's expressions 
"absolute" and "relative" capital or stock might, indeed, with greater 
propriety be turned right about. What he calls the absolute might be 
regarded as the relative, that is, in accordance with his own explana- 
tion, relative to the prevailing effective desire of accumulation in any 
society at any time, taken as a standard. And contrariwise, what he 
calls the relative might well be considered as the absolute, since its 
increase means the increase of the actual accumulations embodied in 
instruments in any society. When, for example, after a rapid advance 
of the arts in any country for ten or twenty years, its total stock of 
instruments comes to be priced, let us say, at $900,000,000 instead of 
$700,000,000, is not that an indication of an absolute increase of capital? 
The notion of permanency seems to go naturally with the notion of 
absoluteness, and, according to Rae's own showing, any increase, at least 
of what he calls absolute capital, is essentially ephemeral.] 

* Wealth of Nations, Book I. c. ix. The paradox contained in the 
passage preceding this quotation is exposed by Mr. Ricardo. 



202 INVENTION ECONOMIC 

goods either at home or abroad, for they do not occasion 
a rise in their price, but rather a fall in it. — " In countries 
which are just advancing to riches, the low rate of profit may, 
in the price of many commodities, compensate the high wages 
of labor, and enable those countries to sell as cheap as their 
less thriving neighbors, among whom the wages of labor may 
be lower." ^ In countries rising to riches, I conceive, on the 
contrary that profits will commonly be high. They will be 
higher than where, the principle of accumulation having had 
time to work up all the materials within reach of its strength, 
a stop is put to its farther advancing the stock of existing 
instruments, and the state of the society becomes stationary. If 
they be lower than in other countries, during the progress, 
it is from the greater strength of this principle. 

In North America, profits and labor [wages] have been as a 
matter of fact permanently high, from the unintermitting 
transfer to that continent of European arts, and from the 
generation of new arts in the country itself. In Kussia the 
passage, in like manner, of new arts has kept the rate of 
profits high. But, of all civilized countries of the present day, 
these, probably, are the most rapidly advancing to riches. 

If, in any society, instruments be at orders of speedy return 
[and consequently the rate of profits high], and we have not 
the [ready] means of ascertaining whether or not this proceeds 
from the actual recent progress of invention, we may fairly 
conclude it does so, if, in that society, there be much economy, 
little luxury, good faith in exchanges, fidelity in the discharge 
of promises, credit consequently extensively prevailing, and 
few breaches in the peace, or transgressions of the laws of the 
community. If, on the contrary, there be little economy, much 
luxury, a want of good faith and fidelity, credit narrowed, 
frequent public and private crimes, we may certainly conclude 
that this position of instruments arises from a deficiency in 
the accumulative, not from recent progress of the inventive 
principle.^ 

It thus appears, that it is through the operation of two 

' yVealth of Nations, Book I. c. ix. 

^[This paragraph is an interpoUatiou taken from p. 322 of the original.] 



INVENTION ECONOMIC 203 

principles — the accumulative, and inventive, — that additions 
are made to the stocks of communities. It would contribute 
something to accuracy of phraseology, and therefore to distinct- 
ness of conception, to distinguish their modes of action by the 
following terms : 

1. Accumulation of stock or capital, is the addition made to- 
these, through the operation of the accumulative principle. 

2. Augmentation of stock or capital, is the addition made to 
them, through the operation of the principle of invention. 

3. Increase of stock or capital, is the addition made to them, 
by the conjoined operation of both principles. 

Accumulation of stock diminishes profits ; augmentation of 
stock increases profits ; increase of stock neither increases nor 
diminishes profits. 

["Accumulation" is the embodying of labor (and its equivalents) in 
new instruments; "augmentation," the embodying of ideas. With "ac- 
cumulation " resistance in some form is encountered, and the rate of net 
returns declines ; with " augmentation " resistance recedes and the net 
yield rises. With " increase " of capital there is no interval formed 
between the progress of the effects of the accumulative and the inventive 
principles (both advancing with equal pace), and hence a negative result 
as regards the basis of the general rate of profit in the community. 
The formation temporarily of an increased interval between the advance 
of the accumulative and the inventive principles, is what is called an 
increase of "absolute" capital or stock. 

Rae uses the term " improvement " in this chapter loosely. Sometimes 
it is synonymous with invention, or the direct effects of invention ; at 
other times it is the ulterior, collateral effects of invention, — as a 
particular manifestation of it passes from one art to other arts, both to 
those which are easier and to those which are more difficult.] 



CHAPTER XI. 

OF EXCHANGES BETWEEN DIFFERENT COMMUNITIES 
OF COMMODITIES OTHER THAN LUXURIES. 



We are now able to enter upon the investigation of some 
phenomena, relating to the exchange of commodities, which we 
have not hitherto particularly noticed. As yet we have only 
attended to the laws finally regulating the exchange of com- 
modities between individuals of the same society, but it is 
necessary that we should also ascertain the general conditions 
existing in those exchanges which take place between different 
societies. 

In our view of the subject, every society considered apart, is 
a system within which all circumstances are common and 
similar ; and all societies compared together, are systems in 
which all or many circumstances are proper to each and 
dissimilar to others. The wages of labor, orders of instru- 
ments, and profits of stock, in one society, for instance, are 
[approximately] the same ; but in different societies, they are, 
or may be, diverse. When two persons in the same society 
exchange commodities, we have seen that the exchanges they 
make are for equal quantities of labor, reckoned according to 
the time when applied, and the actual orders of instruments. 
This happens because one man's personal labor, or the com- 
mand of other men's labor which he may possess, is equal to 
another man's personal labor, or the command of other men's 
labor which he may possess. In separate societies, however, 
this law obviously no longer holds. An individual in one 
society, exchanging with another, in another society, cannot 



OF INTERNATIONAL TRADE 205 

pretend to regulate the amount he is to receive in return by 
the power which he possesses, if he conceives too much de- 
manded, of turning his own funds to the formation of that 
which he desires, for he has no such power. To form the 
commodities he in this case desires, it is necessary he 
should become a member of the society in which they are 
formed, and give up the place he holds in the community of 
which he now makes one. If the manufacturers of cloth in 
England find that the farmers do not give them, in the form of 
wheat, the same quantity of labor that they in exchange give 
them in cloth, they will turn their capital to agriculture, and 
so reduce the price demanded ; but should they find that 
the American farmer puts less labor to the formation of the 
wheat he exchanges for their cloth, than that cloth costs them, 
they have not the same means of lowering his price. 

As the exchanges, therefore, that take place between the 
members of different societies, cannot be regulated by the 
amount of labor embodied in the commodities fabricated by 
each, there woidd seem to remain, as the foundation of the 
principles of such exchanges, only the qualities of the articles 
exchanged. If the manufacturers in England find that, includ- 
ing the expense of transport, they can have wheat as cheap 
from the American farmers as from the British, they will be 
inclined to exchange, and if the American farmers find that, 
including also the expense of transport, they can have English 
cloth as cheap as American, they will be inclined to exchange. 
It is evident, too, that the British manufacturer will be more 
inclined to exchange, if the American wheat come cheaper 
than the British, and the American farmer, if the British 
cloth come cheaper than the American. 

The commodities to be exchanged between any two societies, 
may either minister to use, or to luxury, or partly to both. 
The subject will present itself in the most simple form, by 
discussing separately the divisions of it thus indicated. 

First, then, we have to consider the principles and effects 
of the exchanges of commodities which are in no degree 
luxuries. 

If the members of one society, having before had no inter- 
course with some other society, become aware that in it there 



206 OF INTERNATIONAL TRADE 

is a commodity of this sort, of which they would desire to have 
a supply, the question to be determined is, will they procure 
that supply, and if so, what will be the effect thence resulting. 
As they have hitherto done without the commodity, they must 
already possess some substitute for it. They will then only 
seek to procure it, if they can procure it for less labor than the 
substitute they already possess ; and if they can procure it for 
less labor they will naturally be excited to do so. Were coal, 
for instance, the commodity which the members of one society 
A possess, and of which the members of another society B 
wish to procure a supply, there must be some means in 
existence in B, of more or less fully and easily satisfying the 
wants which that mineral can supply. It may be, for instance, 
that wood is the fuel there consumed. Let us suppose that 
three cords of the wood commonly burnt, are equivalent, in the 
heat given out by them, to one chaldron of coals ; if, then, in 
the society B there be any commodity there equivalent to less 
than three cords wood, and which, transported to A, will in A 
be equivalent, considered as an utility, to one chaldron coals, 
the exchange will be possible, for this difference may pay, or 
may do more than pay, for the expense of transport. If, for 
example, in the society A timber for architectural purposes be 
more scarce than in B, it might happen that the wood used 
for fuel in B, when transported to A in logs, would be in 
estimation there. It might be that in A, owing to the general 
application of the soil to agricultural purposes, and the scarcity 
of forest, a quantity of timber, fit for the use of the builder, 
such as might be got out of a cord of the fire wood used in B, 
might exchange for one chaldron coals. Were, then, an in- 
dividual of the society B, to transport to A a quantity of 
square timber equivalent in B to three hundred cords of wood, 
he might exchange it there for three hundred chaldrons coals, 
and might so return to B with a commodity there equivalent 
to nine hundred cords of fire wood, thrice the amount which 
he had transported from thence. Suppose that the expense of 
the transport of both commodities is equal to three hundred 
cords, then he will just have doubled the stock embarked in 
the enterprise. Were this the state of things, timber, instead 
of being consumed as fuel in B, would be transferred to A, and 



OF INTERNATIONAL TRADE 207 

would return, in the form of coals, an equivalent, after paying 
the charges of transport, to double the labor expended in its 
formation. But in this state of things the whole advantage 
would fall to the society B ; fuel would be more easily 
obtained there, but timber would not be more easily obtained 
in A. As, however, it would be equally in the power of the 
members of the latter society to send their coals to B, and 
there exchange them for wood, were other circumstances 
wanting, this alone would have the effect of equalizing the 
advantages, and in most cases, therefore, they would come to 
be nearly equally divided between two societies so situated. 
The first effects, therefore, would be that the same quantity of 
fuel which before cost in B three days' labor might now be 
obtained for two ; and that the quantity of building timber 
that in A cost three days' labor, might also be obtained for 
two. The revolution effected might nearly compare to an 
improvement in both societies, by which, in the one, two cords 
fire wood might give equal heat to what three had done, and, 
in the other, two logs of timber might serve the same purposes 
as three. Like other improvements, they would not be con- 
fined in their operation to the particular branches of industry 
in which they had place, but would be diffused equally over 
both societies, carrying the whole instruments in each towards 
the more quickly returning orders. Profits would rise equally 
in all employments. The absolute capital of both communities 
would be increased in proportion to the augmented provision 
made for their future wants. This provision, indeed, would be 
so far uncertain, that it might be rendered inaccessible by war, 
or other causes interrupting the commerce between the two 
countries ; and the whole industry and instruments engaged in 
it might, therefore, be compared to a stock engaged in some 
hazardous branch of industry, and running a chance of being 
wholly or partially lost, by the action of uncontrollably 
destructive causes. Abstracting, however, the chances to 
which they might thus be exposed, they would embody as 
real a provision for futurity as any other part of the stock 
of either society. 

In all exchanges taking place between different societies, 
in commodities which are not luxuries, similar principles 



208 OF INTERNATIONAL TRADE 

regulating them, and similar effects flowing from them, may be 
traced. For, if they derive their value not from the gratifica- 
tion they afford to vanity, but from their capacity to supply 
real wants, they may be compared with other instruments 
belonging to the society, satisfying more or less perfectly the 
same class of wants. And when, through the exchange of other 
commodities for them, they can be obtained for less labor than 
such instruments, they will naturally come to be so obtained, 
and will completely or partially fill the place of them. As coals 
will compare with cord wood, so indian rubber will compare 
with leather. New Zealand weed with hempen cordage, slates 
with thatch, copper with iron. In these cases, and in others 
where probably mere utility is sought for, there are means of 
comparing one thing with another; and the substitution of the 
one for the other, when in proportion to the labor necessary 
to obtain it, will more eftectually supply future wants and is 
always a real improvement. 

It will often happen that the process will engage in it more 
than two societies. Thus, the society B might exchange wood 
with C, C might exchange iron with A, and A coal with B, 
Similar principles would still, however, guide its progress, and 
similar effects result from it. While the exchanges were con- 
fined to commodities in no degree luxuries, an increased pro- 
vision for future wants would result from them, and a general 
augmentation of the absolute capital of the societies receiving 
these new supplies, and quickening in them of the accumu- 
lative principle, would be experienced. They would in them 
all have the general effect of improvements, and would operate, 
in the case supposed last, in the same manner as would in B 
some discovery facilitating the transport of wood, in C some 
discovery facilitating the smelting of iron, in A some discovery 
facilitating the mining of coal. The fewer obstructions, there- 
fore, that stood in the way of such transfers, the farther, in 
these cases, would the stock of instruments in those societies 
be carried towards the order A ; as any obstruction that might 
occur would, on the contrary, have the effect of checking the 
progress towards the more quickly returning orders, and keep- 
ing them nearer the order Z. 

The benefits to all parties, arising from such an interchange 



OF INl^ERNATIONAL TRADE 209 

of commodities as we have described, would be liable to be 
interrupted by war or by legislative enactments. These dis- 
turbing causes we have afterwards shortly to advert to, but 
there is one arising from the progress of invention that may be 
properly noticed here. 

As there are no limits to the inventive faculty, so no com- 
munity can assure itself that any commodity which it now 
produces and exports to some other community, may not come 
to be produced in that community, and so be no longer 
exported there. It may be, for instance, that, to return to the 
supposed case we were just considering, in the society B, strata 
of coal are discovered so near the surface as to be as easily 
wrought as in A, and that the spirit of enterprise may there be 
sufficiently active, successfully to engage in the occupation of 
mining for them. In that case coals would there be procured 
for about five-sixths of the labor they had cost when brought 
from A. They would fall in relative value, the absolute capital 
of the society would be augmented, and profits proportionally 
increased. But while in the society B, the effects of the pro- 
gress of invention would be thus beneficial, in A they might 
operate prejudicially. No exportation of coals could now take 
place from A to B, for being necessarily very nearly at the 
same price in the one as in the other society, there would be 
nothing to pay the expense of transport. Iron then could no 
longer be paid for in coals, unless that commodity sold at a 
lower rate. To pay for it, coals must be sold at B for less, or 
some other commodity must be resorted to. In the former 
case the society A would sustain a sensible loss, comparable to 
an increased difficulty in working its mines, and proportional 
diminution of the amount of its absolute capital. In the 
latter, though the loss might be less, it would nevertheless be 
real ; for, by the supposition, coal was the only commodity ex- 
ported, and it could only be so because it was the one bringing 
the best return. The necessity therefore of turning to some 
other article, implies the obtaining of a less return, and a con- 
sequent diminution of the absolute capital of the society, and, 
unless counterbalanced by the progress of improvement, or an 
increase in the strength of the effective desire of accumulation, 
a withdrawal from the reach of the accumulative principle of 

o 



210 OF INTERNATIONAL TRADE 

its members, of some portion of materials before within its 
grasp. 

An interruption of the exchange of articles of real use 
between communities checks accumulation, by taking from it 
the materials on which it exerts itself; but it excites the in- 
ventive faculty, by prompting it to discover fresh materials, 
and new means of forming them into instruments. Accordins;, 
therefore, to the circumstances of the community, and the 
nature of the materials within reach of its members, it may 
come [in the end] either to be a good or an evil. 

Were the intercourse between two communities, of which 
the one A exchanges coal for the wool of the other B, sud- 
denly to cease, the event might be felt as a very great evil, 
and, at first, the substitutes for these materials requiring more 
labor to work them up into instruments of the sort required, 
the whole stock of instruments possessed by both societies 
miglit be carried on in the series some distance towards the 
more slowly returning orders. It might happen, however, that 
in the Society B importing coal, there were beds of coal [cap- 
able of being made] as easy to work as in A, and that in the 
other A importing wool, there were tracts of land as capable of 
feeding sheep as those employed for that purpose in B, In 
this case, it is probable that invention would apply to such 
materials, and that, in time, coal would be obtained in B, at as 
cheap a rate as in A, and wool in A at as cheap a rate as in 
B. Were it so, by the saving of labor and of time in the 
transport of the commodities from country to country, the 
stocks of instruments in both societies would be placed in 
orders of more quick return than they were at the commence- 
ment of the interruption. Whether the loss on the one hand, 
or the saving on the other, might, in the circumstances of 
either society, be fitly esteemed greater, would depend on 
whether or not there were materials in existence that by the 
power of invention might with sufficient ease, and within the 
requisite time, supply the particular wants in question. There 
might not be fit materials, or the time requisite to work them 
up might be too long. 

Before the cession of Norway to Sweden, it was reckoned to 



OF INTERNATIONAL TRADE 211 

produce grain or vegetables for its inhabitants sufficient only 
for four or five months. Its supplies for the rest of the year 
were obtained from Denmark, to which country, in return for 
corn received from it, it exported timber. When the great 
powers had resolved on its annexation to Sweden, a British 
fleet blockaded its coast, the peasantry came in starving crowds 
to the towns, and a country from which the bravest race in 
Europe once issued, was compelled to yield without a stroke. 
The insult then received, and the hardships endured, had the 
effect of giving a great stimulus to agriculture. The more 
opulent formed themselves into societies for the purpose of 
improving the art, individuals skilled in its operations were 
engaged in Britain, and in a few years a great addition was 
made to the agricultural produce of the country.^ The time in 
this case required [allowed] for the formation of instruments was 
too great [short], even supposing there had been a sufficiency of 
materials of which to construct them ; and had not, therefore, 
the society submitted, it must have endured successive evils. 

Many instances, however, might be cited, where the inter- 
diction by war of the intercourse between different countries, 
has very speedily produced a supply of the commodities 
interdicted, and apparently without great injury to the 
nation possessing the materials necessary for their forma- 
tion. " Upon the breaking out of the war with France," 
observes Mr. Gee,^ "and prohibiting French commodities, 
encouragement was given for erecting several of those manu- 
factures here, as the lustring, alamode, and other silk manufac- 
tures for hoods and scarves which the king's royal consort, the 
excellent Queen Mary, took no small pains to establish ; for 
which article alone it is allowed France drew from us above 
£400,000 yearly. At the same time the manufacture of glass 
was established, which before we used to have from France, and 
also that of hats and paper. In his time also the manufac- 
tures of copper and brass were set on foot, which are brought 
to great perfection, and now in a great measure supply the 
nation with coppers, kettles, and all other sorts of copper and 

1 These facts I leai'ned iu a tour through that country in 1818. I have no 
means of ascertaining what is now the state of affairs there. 

2 Trwde and Navigation of Great Britain. Lond. 1738. 



212 OF INTERNATIONAL TRADE 

brass ware. The making of sail-cloth was begun and carried 
on to great perfection, and also sword blades, scissors, and a 
great many toys made of steel, which formerly we used to have 
from France ; in the manufacture of which, it is said, we now 
excel all other nations. The setting up of salt works and im- 
proving of salt springs and rock salt, hath proved very beneficial 
here, and saves a very great treasure yearly, which we hereto- 
fore paid to France for salt and a great many other things 
which I forbear to enumerate." 



CHAPTER XIL 

OF WASTE, OK PURE ECONOMIC LOSS. 

The causes arising from deficiencies in the moral and intel- 
lectual powers retarding the progress of improvement and 
accumulation, and diminishing the stocks of societies, which we 
have hitherto noticed, refer to the matter of which commodi- 
ties consist.-^ There are others proceeding apparently from the 
same deficiencies, which create difficulties in the exchange 
and preservation of instruments, and may be said to relate to 
the manner in which exchanges are made and instruments 
preserved. 

Every thing retarding, or interposing difficulties in the 
exchange of instruments, must have the effect of placing them 
in orders of slower return.^ It must lengthen the period of 
exhaustion, or add to the labor of formation. Instruments 
may be exchanged, as we have seen, either by barter or cash, 
or, through the intervention of credit, — a promise to deliver an 
equivalent at some future time. 

In the case of transfers by barter or cash, were the holders 
of instruments so exchanged to represent them exactly for 
what they are, all difficulties would be done away with, not 
arising from the nature of the things themselves. But it is 
the business of every exchanger to buy as cheaply, and sell as 

1 [That is, they work through the physical make-up of commodities, formed 
and used for different purposes. 

In the original, the treatment of the subject of luxury preceded this 
chapter. ] 

^[This broad statement is of course subject to the limitations laid down else- 
where as to the contingent effects of restrictions upon foreign commerce, and 
as to the difference between trade in luxuries and other trade.] 



214 OF WASTE 

dearly, as possible, and he very frequently, I might say gene- 
rally, endeavors to do so by representing things to be other 
than what they are. Were any one, for example, desirous of 
purchasing a horse, morally certain to whatsoever vendor of 
those animals he applied, he would tell him, as nearly as he 
himself knew, the qualities of the horses he had on hand, and 
their just value, any purchase of this sort he might have to 
make would be made with facility and at once. The pur- 
chaser, however, can seldom depend on the accuracy of the 
statements he so receives. He is often obliged to take much 
trouble, and to spend no little time, before he makes his bar- 
gain, and, notwithstanding, is not unfrequently deceived. The 
time and money thus expended, both by the sellers and pur- 
chasers of horses, and other commodities, is so much dead 
loss to the community, and places the instruments on which 
they are expended in orders of more slow return. Indirectly, 
too, they may occasion still more serious losses. If a farmer 
be deceived in the purchase of a horse, it may very injuriously 
retard his operations at the moment when it is most necessary 
for him to advance them. If a builder be deceived in the 
timber he purchases, it may occasion the speedy decay of the 
whole fabric he erects. 

The amount of loss arising, both directly and indirectly, from 
successful or unsuccessful attempts to pass off commodities for 
what they are not, is, I apprehend, determined by the weak- 
ness of the social and benevolent affections and intellectual 
powers. Where there is the most lively sympathy with the 
distresses and losses of others, one will be most restrained 
from being the cause of loss to another, both from the prompt- 
ings of his own feelings, and from a consideration of the senti- 
ments with which others will regard him. Where the tendency 
and consequences of actions are most clearly seen, one will be 
most cautious of doing any thing, which, by weakening general 
confidence and security, may prejudicially affect the interests 
of society. Such losses will therefore be least frequent where 
the accumulative principle is strongest, and most frequent 
where it is weakest. 

In China every man who sells tells as many lies as he 
thinks have any chance of passing. He is never ashamed at 



OF WASTE 215 

being detected. When that happens, he merely compliments 
the person discovering the intended deception on his sagacity. 
Among the ancients, both Greeks and Eomans, all sorts of 
trickery and artifice in purchasers and sellers seem to have 
been common. Plato makes Socrates say that, in traffic and 
commerce, there is no such thing as an honest man, and Cicero 
has a remark very similar. These, and the like assertions of 
classical authors, have indeed, now-a-days, been put down as 
mere prejudice; but, though we are doubtless a very acute and 
sagacious generation, I can scarce think but that Socrates and 
Cicero knew their own countrymen better than we can do. 
Mercantile honor and fair dealing are modern terms. With- 
out much of the reality of what they import, the extensive 
transactions now carried on between individuals and com- 
munities could not exist. Nevertheless, the things to which 
they are applied want often not a little of being fitly so 
described, and the deficiency in all communities occasions 
a large portion of the outlay necessary to the formation of 
instruments. 

Deceit, however, it is to be observed, when exercised in the 
exchange of mere luxuries, occasions an immediate gain, instead 
of loss, to communities. When there was a prohibition on 
French silks imported into Britain, they were particularly 
fashionable, their great expense rendering them a fit material 
for vanity. The British manufacturer could make fabrics not 
to be distinguished from them, but which of course as British 
goods would not sell. They were, however, readily vended as 
smuggled French goods, by individuals hired to hawk them 
about under that guise. The deceit was certainly an imme- 
diate loss to no one, and a considerable gain to the manu- 
facturer.i The ulterior effects of all deceit, however, in 
weakening the moral principle, must ever be injurious to 
communities. 

In exchanges effected by the intervention of credit the 
necessity of perfectly fair dealing is more apparent, and the 
losses occasioned by fraud and deceit still greater. The per- 
sons giving the credit must generally depend for repayment on 
the good faith of the persons receiving it. The extent conse- 

1 Hansard's Debates, March 8th, 1824. 



210 OF WASTE 

quently to which these triiusactioiis can in auy couiiuuiiity be 
carried, must be measured by the general probity of its mem- 
bers. Where people are inclined to make promises which 
they have reason to fear they may not be able to fulfil, or 
which they know they cannot fultil, the system of credit is 
confined or destroyed. 

[But " the formation of instruments is rendered difficult and 
costly to individuals," not only from the lack of a " spirit 
of integrity in credit transactions," and generally in that 
department of economic activities which is called exchange, 
but also from all forms of " frauds and violence punish- 
able by law," in contrast to mere deceits, in every branch 
uf business.] 

To guard against them always requires some vigilance, and 
occasions some expense, and often demands a good deal of both. 
The loss hence arising may be very considerable. It is said 
that the cloth trade of Verviers, in France, was ruined from 
the number of thefts committed in various stages of the manu- 
facture, occasioning a loss of about eight per cent, on the 
quantity produced. 

The infrequency of crime will also, I apprehend, be found 
chietly to depend on the same principles that give force to the 
effective desire of accumulation, — the general strength of the 
social and benevolent affections, and intellectual powers. 
Where a desire of promoting the common good prevails, and 
there is a clear perception of the means of doing so, infringe- 
ments on the rights of individuals, or violence to their persons, 
will be rare. It is the strength of the moral feelings that is 
the safeguard of the laws. Where these are destroyed, or 
greatly weakened, as where a person has been cast out of the 
brotherhood of society by being marked as a criminal, the 
dread of corporeal pains is scarcely ever sufficient to deter 
from future trespasses. 

The establishment of good laws and the security of the 
system of government, by diminishing the temptation to 
crime, and the chance of escape from its consequences, have 
also, no doubt, great effect. But good laws or government 
can neither be established nor maintained without good 



OF WASTE 217 

morals. When purely selfish feelings prevail laws have no 
power. 

" Quid faciant leges ubi sola pecuuia regnat ? " 

The [injdirect destruction and waste occasioned by wars 
make, also, no small item in the account of losses, to which 
the stocks of all communities are subject. 

The loss occasioned by the deceits and frauds of individuals, 
and by the prohibitions and violence of states, may not unfitly 
be termed waste. 

[The expression " Of Waste," which alone was the original title of this 
chapter, does not seem adequate. It does not give an impression sufficiently- 
distinct from that conveyed by the term luxury. According to Rae's treat- 
ment of this last subject, and according also to the ordinary usage of language, 
wealth or industrial energy may be said to be misappropriated or wasted in 
luxury. The same takes place through the direct expenditui'C occasioned by 
war and preparations for war. 

But what Rae deals with in the present chapter is indirect not direct causes 
of loss ; not with wealth which is created and misapplied, but with wealth 
which is not created at all. This last is a thing which necessarily escapes the 
census-taker in every country, and is indeed the leading subject of our science. 
Economics is nothing if it does not develop an eye of the imagination to 
see that. 

In modern civilized countries, after everything possible is done to minimize 
individual crimes and misdemeanors, it is "the prohibitions and violence of 
states" which constitute the chief preventable cause of pure economic loss.] 



CHAPTER XIII. 

OF THE EFFECTS EESULTING FROM DIVERSITIES OF 
STRENGTH IN THE ACCUMULATIVE PRINCIPLE, IN 
MEMBERS OF THE SAME SOCIETY. 

The mass of the individuals composing any society, being 
operated on by the same causes, and having similar manners, 
habits, and to a great extent feelings also, must approximate 
to each other, in the strength of their effective desires of 
accumulation. In the view we have hitherto taken of the 
subject, we have considered them, as not only approximating, 
but coinciding in this respect. In reality, however, they 
do not do so. Though the desire may be generally of nearly 
equal strength, throughout the bulk of the society, it cannot 
altogether be so, but must vary, in some, in degrees scarcely 
perceptible, in others, as in every community there will be 
men of characters opposite to their fellows, very largely. But 
there are nevertheless circumstances, which, notwithstanding 
these variations, restrain and confine the construction of instru- 
ments, either altogether to the same order, or to orders much 
more nearly approximating to each other, than would be indi- 
cated by the strength of the effective desire of accumulation, in 
the individuals forming them. 

The accumulative principle of the different individuals com- 
posing the same society, may vary from the average strength, 
either by being above, or below it. There will, in every 
society, be some individuals not disposed to construct any 
instruments, but such as are of orders of more quick return 



OF ECONOMIC STRATIFICATION 219 

than those generally formed ; as there will be others, disposed, 
if they have no opportunity otherwise to make additional pro- 
vision for futurity, to expend part of their revenue in working 
up materials even to orders of slower return, than the average 
of the instruments already formed.^ 

Persons of the former class, possessing any amount of funds 
presently available, would be inclined to apply them to the 
formation of instruments, could they obtain materials, returning 
so largely as to correspond to the estimate they make of the 
future and the present. But they will not be able to find any 
such materials, for they will have been previously appropriated, 
and wrought up more laboriously than they would be inclined 
to do, by other members of the society. If, again, the funds 
[accumulated means] of an individual of this class, consists of 
instruments whose returns are future, he will gradually transfer 
them to other members of the society, whose accumulative 
principle is stronger than his own ; for, according to his 
estimate of the future and the present, he will receive more for 
them than they are worth.^ It thus happens, that all the 
members of any society, whose accumulative principle is 
lower than the average, are gradually reduced to poverty. 
The same persons, moving to a community where instruments 
were of orders of quicker return than those correspondent to 
the strength of their own accumulative principle, would acquire 
property. Thus the artisan, or laborer, who, in England, never 
thought of saving, is excited to accumulate property, in North 
America. The Chinese, who, in Europe, would be very 

^ [This last class of accumulators receive an income which includes a clear 
bonus, comparing their psychological condition with that of the marginal 
savers. The sub-marginal constructors of instruments, and the savers of funds 
to invest in titles of property in instruments, are, of course, shut out alto- 
gether in the manner Rae goes on to describe.] 

^[Restating the above in the everyday language of the market-place, it 
might read, — Persons of the former class possessing savable funds would be 
inclined to invest them, could they find safe investments returning so largely 
on the purchase price as to constitute a sufficient inducement. But all safe 
securities are selling at too high a price. If such persons happen to own pay- 
ing property already, the "present value" in the market of the series of 
annuities yielded by it, is so much greater than their own valuation, according 
to their estimate of present and future (their own "discounting" of the 
future), that they part with their ownership.] 



220 OF ECONOMIC STRATIFICATION 

prodigals, are accounted frugal in the tropical regions of Asia, 
and there attain to considerable wealth. 

Individuals whose accumulative principle, is, on the other 
hand, stronger than the other members of the community, 
would be inclined to construct instruments of orders returning 
more slowly than usual, rather than not devote a part of their 
present funds to additional provision for futurity. But this is 
not necessary.^ They are the natural recipients of the funds 
passing from the hands of the prodigal, and their excess of 
providence, balances his defect, and maintains the whole mass 
of instruments in the society, at nearly the same orders. 

It thus happens, that all instruments capable of transfer, are 
in the same society, at nearly the same orders.^ Some instru- 
ments, however, cannot be transferred, for many of them that 
are of gradual exhaustion, and directly supply wants, must 
belong to the persons exhausting them. Wearing apparel, 
household furniture, and sometimes dwelling-houses, cannot be 
the property of any other individuals than those in whose 
service they are exhausted. Such instruments must often, 
therefore, correspond to the strength of the accumulative prin- 
ciple of their possessors. If they belong to persons in whom 
the strength of this principle is greater than the average of the 
society, they will not indeed vary much from the prevailing 
orders, the surplus funds of such individuals, going, as we have 
seen, to the acquisition of the stock of the prodigal. The 
difference is probably just sufficient to indicate the character 
of their owners. Thus, if we inspect the dwelling-houses and 
furniture of rigid economists, we generally perceive that they 
have an air both of durability and efficiency, distinguishing 
them from those of the rest of the community. 

When, again, individuals, in whom the strength of the 
effective desire of accumulation is below the average of the 
society, have no other stock but what is embodied in instru- 

^ [That is, it is not necessary so far as the general situation existing at any 
one time is concerned. With the lapse of time strong savers may, and often 
do, descend to a lower margin of investment or accumulation.] 

^[With those not capable of transfer there exists at any time all degrees of 
situation in respect to the series of " orders," and hence of differential gains 
and losses.] 



OF ECONOMIC STRATIFICATION 221 

raents of this sort, these instruments, in their exhaustion of 
them, will correspond to the weaker power of this principle. 
Such, unfortunately, is sometimes the case, with what are 
termed the lower classes of society ; causes to which we shall 
afterwards advert, sometimes generate a spirit of improvidence 
among these classes, and diminishing the estimation in which 
they hold the interests of futurity, incapacitate them from 
expending any present funds, as a provision for these interests, 
if they do not return either very speedily, or very largely. 
The consequence is, that the instruments of this sort which 
they possess, have but a very small capacity for the supply of 
their coming needs, and that they are unable to extricate them- 
selves from pressing poverty. 

Thus, suppose that a man in this class, has two different 
hats offered him, the present appearance, and immediate com- 
fort in the wear of which are nearly equal, but of which the 
one, from its being formed of better materials, and these 
wrought up with more care, is much more durable than the 
other, and cannot be afforded but at a higher price than it. 
Let it be that four days' labor is demanded for the one, and six 
and a half for the other, but that the former will last only one 
year, the latter two. It is evident, that, if the effective desire 
of accumulation of the individual is very weak, not carrying 
him beyond the order A, he will prefer the former, and at the 
expiration of the year will consequently have to expend again 
an equivalent to four days' labor, instead of having this want 
supplied by a previous expenditure of two and a half days' 
labor.^ 

"We may, in most cases, judge very accurately of the strength 
of this principle among individuals of this order of society, 
peasants, mechanics, day-laborers, and domestic servants, by 
the qualities of the instruments of these sorts with which they 
provide themselves. By observing, for example, the kind of 
shoes, gowns, blankets, which a woman in this rank of life 

1 It is a matter of indifference, it may be observed, to the hat maker, which 
of the two he disposes of. Both hats are to him instruments for procuring 
labor, or some equivalent to it. Of all his stock, it is only the qualities of the 
one he makes choice of for his own wear, that can, in any degree, indicate the 
strength of his own effective desire of accumulation. 



222 OF ECONOMIC STRATIFICATION 

purchases, one may form a near guess of her character. "Were 
she to make a point of selecting such as would wear well, 
though somewhat dearer, or less showy, we might safely con- 
clude that the influence of the present, did not prevent the 
interests of the future from being carefully regarded. On the 
contrary, did she choose the unsubstantial, but more showy, or 
cheaper article, we might with equal certainty infer, that the 
present, in her estimation, far outweighed the future. All who 
have had opportunities of making such observations, must have 
remarked the influence, which the one line of conduct, or the 
other, exercises on such individuals. The difference between 
them constitutes the main distinction between thrift, and un- 
thrift, the former of which is the only safe means that persons 
in the lower walks of life possess, through which they may give 
a beginning to their fortunes. The store accumulated by the 
exercise of the virtue of providence, which, as it shows itself 
in them, we thus denominate, enables them to turn the funds of 
their daily labor to the construction of other instruments than 
those, and, at length, to add largely to that stock which is 
destined to supply the future wants of the whole society. 
What is true concerning one individual, is true concerning 
many, and on this account, the degree of strength of this 
principle possessed by what are called the lower orders, 
exercises a great influence on the amount of the general stock, 
accumulated by the society. The influence, in this respect, of 
those who form that class, is, indeed, much more important 
than we might at first suspect. Their greater numbers would 
alone make up for the smaller power of each, but besides the 
weight which this consideration is entitled to, the amount of 
labor that may, with advantage, be accumulated by the mere 
working man, in instruments of this sort, is, in reality, very 
considerable. His dwelling and its contents may fitly be con- 
sidered as a store that he possesses, for the supply of the 
future wants of himself and family, or, what is the same thing, 
for the abridgment of their future labor ; and according as 
there is much or little of this provision wrought up in them, 
will the one be supplied or the other saved. First, the house 
itself, as the place in which he and they live, and pursue many 
of their various occupations, will not yield the advantages it 



OF ECONOMIC STRATIFICATION 223 

ought, if the apartments be not so roomy and well lighted, as 
neither from the closeness of the atmosphere to induce debility 
or disease, nor, from their confinedness and obscurity, to cramp 
and retard the inmates in their several labors. Then, accord- 
ing to the compactness and finish that is given to the walls 
and other parts will the inclemency of the weather be more or 
less excluded, and a greater or less quantity of fuel, be in 
future requisite. The cupboards, where things may be readily 
put past, and as readily found, and where they are preserved 
from destroying causes and accidents, the cooking utensils, the 
bedding, and the numerous other articles of the sort, that 
enter into the domestic economy of a frugal and industrious 
family, are to be considered, in like manner, as so many means 
by which future labor, or future expense, may be prevented or 
diminished. The extent of the saving which the provident 
working man in this way effects, is sometimes very great. In 
a rude, or imperfectly finished fabric, fuel must be wasted ; in 
one where there are not proper conveniences for preserving and 
cooking food, food must be wasted ; and where there are not 
fit places for depositing articles of wearing apparel, they must 
soon get dirty, and receive much unnecessary damage. In a 
well finished, and convenient habitation, too, the inmates lose 
no time, either from torpor in winter's cold, or languor in 
summer's heat ; they have space and comfort to pursue their 
various labors, and unless it be the periods given to repose, 
and to their meals, may employ the whole time they spend at 
home, in some useful or agreeable occupation. The animal 
frame, also, it is to be observed, when exposed to the extremes 
of heat and cold, and to damp, seems to require a greater 
supply of nourishment, than when properly sheltered and pro- 
tected. This is seen in the inferior animals, and agreeing with 
them in other parts of his corporeal constitution, man does not 
here differ from them, and when comfortably lodged, is pre- 
served in health and vigor, on a diet which he would else find 
too scanty. The amount of provision for future needs, that 
may, in a similar manner, be embodied by a laborer or 
mechanic having a family, in [superior] bedding, and other 
furniture, and in kitchen utensils, is very considerable.^ 

^If the reader be skeptical concerning the effects of a sufficient supply of 



224 OF ECONOMIC STRATIFICATION 

It is to be here observed, that the prevalence of a really 
economical spirit among the working class, implies no diminu- 
tion of the [aggregate] purchases made by them. On the 
contrary, it being the desire of the laborer, under such a 
supposition, to turn every sixpence he can earn to some useful 
employment, either to the acquisition of necessaries, or other 
commodities, he must have as many demands on the capitalist 
[on the general market] as before. The change produced, 
would be, in the articles purchased. The proportion of those 
providing for the wants of futurity would increase, that of those 
ministering to the gratifications of the present, diminish. 

Thus, such a spirit pervading the working classes in Great 
Britain, at the present period, would probably lead them to 
abandon all delicacies of fare, and would occasion a diminished 
consumption of alcoholic liquors, tea, coffee, silks, expensive 
calicoes, and the more showy articles of apparel. It would, 
on the other hand, increase tlie demand for the higher priced, 
and more substantial cloths, cottons, blankets, kitchen utensils, 
and articles of that sort, and for all matters used in the con- 
struction of dwelling-houses. 

Neither, it is to be observed, would the prevalence of a 
contrary spirit among those orders, and a proneness to seize 
on the enjoyments of the present, occasion any immediate 
diminution of their demands on the capitalist. It would 
merely lead to his providing for them a greater amoutit of 
instruments of sudden exhaustion, contributing to the gratifi- 
cation of the instant, and a smaller amount of those of gradual 
exhaustion, providing for the wants of futurity ; and to his 
giving a construction to the latter, that might make them 
correspond during the period of their exhaustion, to the lower 
degree of the accumulative principle of the individuals in 
whose service they were to be exhausted. Such a circumstance 
would, therefore, occasion the production of a larger portion of 

materials and utensils, in diminishing the expense of diet, I would request him 
to reail Count Rumford's £'.s'.«a//s'. 

[It is apparent that the foi-egoing argument inculcating the virtue of thrift, 
is verj' different from the usual one. For poor people to save money, as tliey 
are commonly urged to do, often causes them to pursue a most uneconomical 
course of actiou. ] 



OF ECONOMIC STRATIFICATION 225 

delicacies, of articles of nourishment more grateful to the 
senses, but not more nutritious or more wholesome than 
cheaper fare, of fewer substantial articles of dress and furni- 
ture, and more of those that are flimsy and showy. 

The whole stock of instruments owned by the laboring 
population, would thus contain a smaller amount of the means 
of lessening future labor, or expense, as their effective desire 
of accumulation diminished in strength. Even instruments 
that they do not own, but of which they pay for the use, as 
dwelling-houses rented by them, are in a great measure, 
reduced to the same order as those which they would them- 
selves form. In the rank of society above them, improvidence 
is long before it show on the dwelling, it attacks first other 
funds ; but, as they have not these other funds, it necessarily 
shows itself in the funds they have. Thus, if a family of 
improvident habits get the use of the best finished dwelling, 
they soon so damage it, as to deprive it of its efficiency. 
Some manifestation of what we call careless habits, want, 
that is, of taking thought of the consequences of what one is 
doing, breaks, we shall say, a pane or two of glass, in some of 
the windows. To get these replaced is present expense, and 
trouble ; demands, perhaps, the doing without a pot or two of 
liquor, or some other immediate enjoyment, and requires the 
trouble of going for the glazier, or acting for him. An old 
hat or two, or some bundles of rags, stuffed into the holes, 
shifts off this denial of present pleasure, or ease, to some other 
time, a time which, similar habits, while they render the 
arrival of it more needful, indefinitely postpone ; and the 
window that had been formed to exclude wind and wet, and 
admit light, serves, at last, to let in the wet and wind, and 
shut out the light. Pursue the effects of these habits, this 
absorption in the present, and heedlessness of the future, as 
they show themselves upon the plaster, the floor, the ceiling, 
and we shall find them soon doing away with the efficiency of 
the whole dwelling, for procuring enjoyment, or saving toil, 
and reducing it, as far as it is a provision for the future wants 
of its inmates, to a condition little superior to that of the 
miserable mud hut. 

The presence of this evil, to a greater or less extent, is 

p 



226 OF ECONOMIC STRATIFICATION 

marked, by the high rates of interest given, for the petty sums 
borrowed by individuals of this class. The increase that is 
said to have taken place in the number of pawn-brokers' shops 
in England, and the high rate of interest there demanded, and 
given, by mechanics, for small loans afforded to one another, 
would seem to indicate its presence, to a degree sufficient to 
alarm a lover of his country.^ 

When we come to treat of the causes that seem the great 
agents in diminishing the stock owned by a community, the 
mode in which the strength of the accumulative principle is 
weakened, and extravagance introduced among the lower 
classes, and the effects arising from these circumstances, will 
present themselves to our notice. It will then appear, that 
this diversity of the orders of instruments owned throughout 
a community, can never exceed certain limits. On this 
account, and because the stock belonging to the lower classes, 
when the accumulative principle is much lower with them than 
with the higher ranks, is always inconsiderable, the orders to 
which instruments belong in the same society, and the [pecuni- 
ary] returns they make, or the ordinary profits of stock, may 
be said to be nearly equal throughout every community. 

This uniformity in the orders of instruments, and in the 
returns made by them, in conjunction with the system of 
calculation, by which, as we have seen, transactions relating 
to the transfer and accumulation of capital are regulated, pro- 
duces eftects on the conceptions of the individuals concerned, 
worthy of being noticed. 

The rules by which all persons regulate their proceedings 
in the construction of instruments, are drawn from the 
[pecuniary] returns made by them, that is, the profits yielded 
by them. If an instrument, or a series of instruments, which 
it is proposed to construct, promise to yield the usual profits, 
the enterprise is undertaken, and, if it make the anticipated 
returns, it is considered a profitable, or gaining business ; if it 
do not promise to yield, and do not yield the usual profits, it 

1 Pawn-brokers charge, I believe, about 20 per cent. The combinations of 
the working classes in societies, or unions, have lent their members small 
sums, if I well remember, at a rate nearly equal. I cannot, however, recollect 
my authority for these statements. 



OF ECONOMIC STRATIFICATION 227 

is considered an unprofitable, or losing business. Probably, 
too, it is not considered, that this mode of expression is 
correct, only as relative to a particular society, and not abso- 
lutely, to all societies, and that what in one country or time, 
may be an unprofitable undertaking, will, without any change 
of returns, be profitable in another country or time, and vice 
versa. 

Thus, suppose an English land-holder, whose income far 
exceeded his outgoings, to be asked why he does not apply 
his means to enclosing and draining some sea marsh, his 
answer probably would be, " it would not pay : it would only 
yield me two per cent, when finished, and landed property 
ought to yield four ; I can always find estates to purchase, 
which will produce that." Ask him, why, instead of stone 
fences round his fields, which decay, or hedges, which require 
constant trimming and dressing, he does not put iron railings, 
he will give the same answer, " it would not pay." Ask the 
house-builder, why this is not cut stone, instead of brick, that 
oak instead of pine, this again iron instead of oak, or that 
copper instead of iron, and consequently the whole fabric 
doubly durable, he also will reply " it will not pay." In all 
these cases, and a thousand others that might be put, the 
answer is abundantly sufficient as regards the individual, but 
is no answer at all as regards the society. The only answer 
that can be given, in old countries at least, for such or similar 
neglect of materials, is, that there, the effective desire of 
accumulation is not sufficiently strong, to reach them, in the 
present state of science and art. Were there fewer prodigal 
land-holders in England, estates could not be so easily got, 
and part of the funds of those who buy estates, would be laid 
out in improving land at present unproductive, and the salt 
marsh might be drained. In the same way, houses and other 
instruments would become more substantial, and better finished, 
were the strength of the accumulative principle throughout 
the whole society to advance. 

In China, precisely similar replies would be made by 
capitalists, concerning the draining of marshes, the erection of 
more substantial buildings, and other enterprises requiring a 
large present expenditure, for a remote future return. There, 



228 OF ECONOMIC STRATIFICATION 

such undertakings would be really unprofitable, not paying 
the usual profits of stock; and they can only in like manner 
become profitable, by the accumulative principle acquiring 
increased strength, and instruments being wrought up gene- 
rally to orders of slower return. 

This, however, is not the view which most readily presents 
itself to practical men. To a person engaged in the practice of 
an art, the particular mode which the circumstances of the 
country to which he belongs has rendered the most profitable, 
and best, is considered as absolutely the best, and most profit- 
able; and if he remove to another country, he is apt to conceive 
not only that his knowledge of the art is superior, which may 
perhaps be true, but that the precise mode in which he applies 
that knowledge to practice, is also the best, that can any- 
where be adopted, which is very possibly erroneous. 

An English farmer, for example, who comes to North 
America to pursue his art, almost always commences on the 
same system which he followed in Britain. His agricultural 
implements, his harness, his carts, waggons, etc., are all of the 
most durable and complete, and, therefore, of the most expen- 
sive construction, and his fields are tilled as laboriously, and 
carefully, as were those he cultivated in his native land. 
Some time usually elapses, before he discovers that he may do 
better by being content with more simple, and less highly 
finished implements, and that it will be for his advantage to 
cultivate his land less laboriously, though not less systemati- 
cally. His neighbours tell him, indeed, from the first, that if 
he expects the same profits as they have, he must have less 
dead stock on his hands, and must give more activity to his 
capital ; but he is slow of believing them. 

Similar observations might be made, concerning almost 
every other class of artists, who emigrate to the new world. 
They all, at first, give a degree of finish to the materials on 
which they employ their industry, that is unsuited to the 
circumstances of the country. 

[But while individual or class divergencies from what may 
be called the standard of the effective desire of accumulation 
in any society, produce but relatively unimportant effects upon 
the character of the mass of instruments possessed by members 



OF ECONOMIC STRATIFICATION 229 

of the society, they produce effects of the utmost importance 
(as has already been suggested), upon the character of the 
population itself. Instruments at any time stand at approxi- 
mately the same " orders," but the members of all advanced 
societies are stratified. To treat economic stratification ade- 
quately would necessitate a study of great complexity, since 
it comes about through the operation of several principles, in 
addition to the pure accumulative principle, " always acting 
in combination." Some further consideration of the subject is 
as follows.] 

To add continually to the stock of any community, even 
sometimes to maintain it without diminution at its actual 
amount, is a process in the prosecution of which difficulties 
always oppose. While the funds of any society increase, the 
numbers among whom those funds are to be shared also 
[normally] increase. The greater annual revenue which in- 
vention and accumulation provide, though it must support a 
more numerous population, may not support a population 
having, individually, a greater share [amount] of the means of 
comfort or pleasure, than that possessed by the members of 
the society when improvement was yet in its infancy. To 
carry the community still farther onward, even perhaps to 
maintain it in its place, requires, therefore, generally, that the 
interests of futurity should hold the same relation to those of 
present time in the minds of the members of the society as 
ever. If, therefore, among any of the divisions of the body 
politic, futurity weighs more lightly when compared with the 
present than it did before, there there will be weakness, — 
an incapacity to advance or even to maintain the same 
position may be experienced, and, that which is defective 
drawing to it what is sound, from this point the progress from 
bad to worse may commence. The course of society may thus 
be said to be always against an opposing current, which, if it 
cannot be stemmed, sweeps downward with headlong force. 

" Sic omnia fatis 
In pejus ruere, ac retro sublapsa referri. 
Non aliter, quam qui adverso vix flumine lembum 
Remigiis subegit : si brachia forte remisit, 
Atque ilium in praeceps prono rapit alveus amni.'' 



230 OF ECONOMIC STRATIFICATION 

As a foundation for the few observations which our limits 
permit me to make on this part of the subject, it is necessary 
to refer to a circumstance, the truth of which was assumed in 
an early part of the discussion. " The numbers of every 
society," it was said, " increase, as what its members are 
inclined to esteem a sufficient subsistence, is provided for 
them." 1 

The only classes in society which our inquiry has con- 
sidered, are the two of capitalists and laborers. With regard 
to them we might a priori^ and abstracting our attention from 
what we know to be the fact, be in doubt which of the follow- 
ing suppositions would be correct. 

We might suppose that both classes would reckon that a 
sufficient subsistence which had supported themselves [in the 
past], and that the numbers of both being equally multiplied, 
the average revenues of the individuals composing both might 
remain the same ; or we might suppose that neither class 
would reckon that a sufficient subsistence on which they had 
been supported, and that they would not add to their numbers 
but in a proportion less than the additional funds provided, 
so that the average individual incomes of both capitalists and 
laborers, would be equally and continually increased ; or, 
finally, we might suppose that the capitalists would add more 
to their numbers than to their revenues, or that the laborers 
might do the same thing. 

But though it might be difficult, a priori, to determine 
which of these would take place, yet, in fact, we generally find 
that, in the progress of society, the increase of the numbers of 
capitalists does not keep pace with the increase of their stocks 
and incomes, while that of laborers does keep pace, or does 
more than keep pace, with their incomes. 

The cause of this circumstance may, I think, be shortly 
stated as follows. 

Marriage may be desired both for the pleasures of sense, 
and for those of sentiment and affection. But, among men of 
even moderate fortune, it does not in general add to the sum 
of their purely sensual gratifications. It were obviously absurd, 
considering the lives which most young men in this class in 
1 See Chapter III. 



OF ECONOMIC STRATIFICATION 231 

Europe lead, to speak of celibacy as implying abstinence. 
Purely selfish motives will never, therefore, lead such men to 
form this connexion. They will rather keep them from it, 
vanity aiding, or prompting them to the resolution of refrain- 
ing from any such union, until they have a prospect of raising 
their families above their own rank. 

Among men in the laboring class, again, marriage generally 
adds to the amount of immediate sensual gratifications. Purely 
selfish motives, therefore, side with those of sentiment and 
affection in prompting them to it, and they are not so apt to 
entertain the ambition of raising their families above their own 
condition. Hence, while capitalists are inclined to think that 
only a sufficient subsistence for their offspring, which exceeds 
what they themselves were supported on, laborers are content 
if they leave their children in the same condition as them- 
selves. It thus happens, that the one class has a tendency 
continually to rise above the other. 

This separation has farther effects. 

Vanity itself is sometimes a coadjutor to the accumulative 
principle. A man's pride is sensibly gratified by rising, as it 
is called, in the world, and placing himself on an equality with 
those to whom he was once inferior. But the further they are 
above him, the greater his difficulty in raising himself to their 
level, and the less his hopes of any gratification to mere vanity 
from this source. It is, I apprehend, in a great measure on 
this account, that as capital increases, there are fewer instances 
of laborers making vigorous efforts to accumulate property. 
Vanity, losing hopes of acquiring distinction by accumulation, 
is entirely occupied in exciting to [economic] dissipation. The 
laborer seeks preeminence in displaying his abilities to spend, 
and employs any spare funds he may possess in the purchase 
of fineries, in treating his companions at the ale-house, and in 
similar extravagancies. 

The prevalence of such habits and sentiments among the 
laboring classes, produces various evils. Neglect to employ 
any part of the earnings of to-day, in making provision for the 
wants of to-morrow, every now and then, when that morrow 
brings nothing for itself, gives rise to severe suffering. The 
condition of the laborer fluctuates between abundance and 



232 OF ECONOMIC STRATIFICATION 

dissipation, and want and misery. The society loses, first, the 
benefits of that stock, which the laboring classes accumulate in 
a better state of things. It loses, also, the amount requisite 
to keep the laborer from starvation when in necessity, or to 
raise up other laborers, to supply the place of those who 
perish from want, or the diseases consequent on it. These 
may be called direct evils ; those which are indirect are much 
greater. 

Waste [as previously defined and explained] accompanies 
dissipation. When laborers are in general improvident and 
extravagant, very many of them must be dishonest. Men are 
naturally suspicious of persons whose expenditure exceeds the 
bounds of prudence, and they have too often reason to be so. 
Honesty is at last the best policy, but it is only at last. 
Deceit and knavery very often succeed better at first, and, 
therefore, people who look not beyond what is present and 
immediate, are very apt to resort to artifice and fraud, to get 
rid of the necessities which their extravagance brings on them. 
Hence, such a state of things would imply much watchfulness, 
many checks and contrivances to guard against fraud and 
violence, and much loss, both from them and from the expen- 
sive machinery necessary to restrain them. The most pre- 
judicial, however, of all the mischiefs that belong to our 
subject, brought on by vicious principles of action pervading 
the lower classes, is the gradual spread of similar manners and 
feelings through all the orders of the state. The middle and 
higher classes of society may be said to rest upon the lower ; 
when decay, therefore, infects the foundation, the structure 
must fall. By looking back for a generation or two, we shall 
find that nearly all the capitalists in the nation have sprung 
directly from the people, and that to them we must finally 
trace the greater part of that honorable enterprise, frugality, 
and perseverance, which have given prosperity and power to 
the state. When the principles that actuate the great lower 
and sustaining mass have a large mixture of benevolence, self- 
denial, and probity, and when there is nothing in the institu- 
tions of the society keeping them down as a degraded caste, 
there is a constant mounting upwards of the elements of 
health and strength, giving firmness and vigor to the whole 



OF ECONOMIC STRATIFICATION 233 

body politic. When, on the contrary, the proper vices of the 
higher ranks, luxury, extravagance, and their attendant evils, 
instead of being counteracted by a continual infusion of the 
severer manners, and more self-denying morals, that should 
belong to the lower, find those orders partaking as far as 
possible their follies and levities, admiring them, and if 
required ready to minister to them, we may assure ourselves 
that much unsoundness lurks beneath whatever show of pros- 
perity the outward condition of national affairs may exhibit. 
It will, I believe, be found that, in civilized societies, decay 
has generally thus proceeded from below upwards, and that a 
deficiency in the lower classes, of the principles exciting to 
economy, has gradually checked accumulation and invention 
throughout the whole body, and at length produced universal 
degeneracy and decay, and introduced the reign of waste and 
violence. " Semper in civitate, quibus opes nullse sunt, bonis 
invident ; Vetera odere, nova exoptant ; odia suarum rerum 
mutare omnia petunt." 

The experience of all ages proves the justice of the observa- 
tion of the Eoman historian. That state can never enjoy 
tranquillity, which is oppressed by a crowd of 

"Hungry beggars, 
Thirsting for a time of pell-mell havock 
And confusion." 

But to trace at length the connexion between these [various 
social tendencies] is impossible, without reference to the 
subjects of rent, and of population, which are not embraced 
in our plan. I may, however, in conclusion, observe that 
though, for the sake of simplicity of exposition, I have 
assumed, all along, that the wages of labor constitute an in- 
variable quantity, I yet conceive that, in a society making 
a steady and healthy progress, they should rather be con- 
tinually increasing, the laborer as well as the capitalist, 
gaining something by the improvements which the progress 
of invention produces. 

[A portion of Eae's Essay on Education (1843), mentioned 
in the biographical sketch, may be reproduced to advantage in 
this connection.] 



234 OF ECONOMIC STRATIFICATION 

" The unsatisfactory results ou human happiness which the 
progress of civilization has hitherto exhibited, as measured by 
the visible condition of any ten thousand taken at random 
from the ancient and modern population of Great Britain, has 
given rise there to a feeling of despondency and alarm among 
a numerous and not unintluential class, as to the results that 
are to spring from its farther advance. They dread any 
further progress. They would wish to stop where we are — 
even, if possible, to bring things back to the condition of the 
good old days of our fathers. It is a vain attempt, we are 
hurried forward by an irresistible impulse. All in our power 
to do is to use every effort to direct our onward course aright. 
Art and science, and with them wealth, must increase and 
advance. The sphere of real philanthropic exertion is confined 
to elaborating the possible good they may produce, restraining 
and extirpating their possible evils. 

" Now, though the subject has given rise to many intricate 
and perhaps not very satisfactory discussions, there is one view 
that may be taken of this progress of science, art, and wealth, 
as affecting the condition of humanity, by no means difficult to 
seize, and which will sufficiently indicate one main cause of 
the evils that have overtaken, and those which yet threaten to 
overtake, our modern civilization. 

" It is in the nature of this progress to convert the original 
simple and rude tools, first, into instruments of greater cost 
and efficiency, and these again into complex and difficultly 
constructed machines, still more costly and still more efficient. 
The distaff becomes a spinning wheel ; and that, changing its 
form, and wrought by other powers, is made part of a woollen 
factory. The rough edged blade of the original knife is first 
cut into a regular saw, wrought by one hand ; it is then put 
into a frame, which two men operate ; and this, in turn, 
by means of crank and pinions, is made to go by water, 
and becomes a saw-mill. Even a farm, in this manner, 
with all its appendages, may be said to become a great 
machine or factory — a factory for the production of crops. 
What was before the work of the hands from year to year, 
is now, in such countries as England, brought about in 
a great degree by machinery and scientific processes, re- 



OF ECONOMIC STRATIFICATION 2P.5 

quiring a large surface to ojjerate on, and many years for 
their completion, 

" And so it is with all our implements, they are passing on 
to great machines. This progress can be averted by no con- 
ceivable process that would not have the effect of fettering all 
the active powers of humanity. It is the inevitable con- 
sequence of man's asserting and employing the dominion over 
the realms of nature which his Creator has bestowed on him. 
Placing ourselves in the position of the philosophers of the age 
of Bacon, it will be difficult for us to assign a reason why we 
would not have hailed the discoveries of which they are the 
results as great inventions, conferring benefits on the whole 
human race, without being a means of occasioning wrong or 
sorrow to anyone.^ And yet there was a question which might 
by possibility have occurred to the philosophic philanthropists 
of that day. ' Who are to be the owners of these great 
machines ? Will the mechanics and artisans who now wield 
the tools own the machines, or will they be the property of a 
distinct class ? ' We cannot ascertain how they might have 
a priori determined the question. It is most likely, perhaps, 
that they would have conceived that the owners of the tools, 
clubbing together to purchase machines, would have owned the 
machines. To us, experience has determined it. So constantly 
has it occurred that it may be said it has invariably happened, 
that the former artisans, in giving up their tools, have never 
become the owners of the machines that have succeeded them. 
These machines, manufactories, or whatever name may be 
given them, come to be owned by a distinct class. The opera- 
tive has no property share in the industrial operation, he owns 
nothing but his hands and the art of using them fitly. For 
opportunity to use them, and for pay for their use, he depends 
on the owner of the machine. He suffers in consequence 
a degradation in the social scale. Formerly he was a small 
capitalist, now it is the characteristic of his condition to be a 
mere operative, destitute of capital. The difference may be 
seen by recalling the pictures left by Hogarth and Scott, when 

1 Etenim inventorum beneficia ad universum genus humanum pertinere 
possunt — inventa beant et beneficium deferent absque alicujus injuria aut 
tristitia. 



236 OF ECONOMIC STRATIFICATION 

the change was just coming over them. Compare the in- 
dustrious apprentice and the father of BaiUe Nicol Jarvie, 
with the present factory boy, or look at the fate which, in our 
conception, awaits any of our handicrafts when the revolution 
[through which modern industry seems destined to pass in all 
its branches is complete]." 



CHAPTER XIV. 

OF THE PRINCIPLE OF THE DIVISION OF LABOR. 

Not having been able without interrupting the course of 
investigation, to enter into a discussion of the principle of 
the division of labor, as viewed by Adam Smith, I have 
thought it better to place apart the observations I have to 
make on it.^ 

In the Wealth of Nations, the division of labor is con- 
sidered the great generator of invention and improvement, 
and so [indirectly] of the accumulation of capital. In the 
view I have given, it is represented as proceeding from the 
antecedent progress of invention, and increase of stock, and 
as operating chiefly by quickening the exhaustion of instru- 
ments, and so placing them in orders of more speedy return. 
Now in reality, as far as its origin is concerned, the account 
of the matter which we find in the Wealth of Nations, is 
more favorable to the latter supposition, than to the former. 

" In a tribe of hunters, or shepherds, a particular person 
makes bows and arrows, for example, with more readiness 
and dexterity than any other. He frequently exchanges them 
for cattle or for venison, with his companions ; and he finds 
at last that he can in this manner get more cattle and 
venison, than if he himself went to the field to catch them. 
Prom a regard to his own interest, therefore, the making of 
bows and arrows grows to be his chief business, and he 
becomes a sort of armorer. Another excels in making the 
frames and covers of their little huts or moveable houses. 
^ [In the original this chapter was an " appendix " to the second " Book."] 



238 OF DIVISION OF LABOR 

He is accustomed to be of use in this way to his neighbors, 
who reward him in the same manner with cattle and with 
venison, till at last he tinds it his interest to dedicate him- 
self entirely to this employment, and to become a sort of house 
carpenter. In the same manner a third becomes a smith or 
a brazier ; a fourth a tanner or dresser of hides or skins, the 
principal part of the clothing of savages." 

If this be a true account of matters, it is evident, that 
it is the antecedent progress of invention, and the existence 
of the several arts of the bow-maker, the hunter, the car- 
penter, the brazier that is the real cause of the separation 
of the members of the society into artists of different sorts. 
I rather think, however, that it will be found, that separate 
artists liave come to exist from the passage of individuals 
from one community to another, and there carrying with 
them the arts proper to each.^ If, for example, in any par- 
ticular tribe, the art of reducing from the ore and working 
up some of the metals, were well known, and were chance 
to throw a member of it among another tribe ignorant of 
this art, he might come to employ himself altogether in the 
smelting and giving form to metal, and there might come to 
be a class, whose chief employment were that of working in 
metal. But it is of little consequence how the separation of 
employments was brought about. The real question is, do 
the acknowledged advantages of it proceed directly from the 
increased efficiency of the labor of the workman ; or from 
the stock of instruments of the society being thus in much 
more constant employment, and its being, therefore, in the 
power of the accumulative principle to give them a much 
more effective construction. 

The efficiency of the labor of the workman may be ad- 
vanced, either by his dexterity being increased, or by an 
improvement in the construction of the implements with 
which he works. 

i[Kae is supported in this surmise by Biicher (Iiidnsfrial Evolution), who 
maintains that the primitive division of employments was iater-tribal, 
rather than by classes and individuals within each tribe. From the earliest 
times there has been, however, a separation of employments as between 
the sexes, affording a point of origin of arts.] 



OF DIVISION OF LABOR 239 

1. As concerns his dexterity, it is to be noted that it is 
chiefly in the beginning of art that great manual dexterity 
is requisite. Then the hand is the great instrument. The 
manual dexterity of the savage in hurling his dart, or shoot- 
ing with his bow and arrow, in guiding his canoe by the 
pole or paddle, in framing his fishing and hunting apparatus 
with the rude tools he possesses, far exceeds that necessary 
to the civilized man, not only in the common, but even in 
more delicate arts of civilized life ; and, were we to take 
into the account things generally confounded with manual 
dexterity, quickness and accuracy of sight, and delicacy and 
flexibility of the other organs, the disparity between the two 
would be much greater. As art advances from its first rude 
elements, the hand does less, the instrument more. To 
acquire the manual dexterity necessary to guide a bark canoe 
with security and speed, requires the practice of years. To 
row a boat equally well might be learned in a few months. 
The mere manual dexterity necessary to move the different 
pieces of mechanism that govern the motion of a steam- 
boat, might be acquired in a few days or hours. 

It may be remarked, that the examples of this dexterity 
adduced in the Wealth of Nations, are from arts where the 
implements are exceedingly simple, and where, of conse- 
quence, the hand is the great operator. Were improvements 
taking place in the art of pin-making, or nail-making, that 
would be done by the instrument which is now done by the 
quick and complex motions of the hand. In fact, in the 
arts in which the greatest improvements have had place, 
such as in the cotton manufacture, the mere manual dex- 
terity requisite is very easily acquired. In a few weeks, or 
months, the limit is attained. But, when the manual dex- 
terity requisite for the practice of any art can be attained 
in so short a time, it cannot matter much to the society or 
to the individual, whether the workman have to learn one 
or several arts. Besides, the acquisition of any difficult art 
very much facilitates the attainment of any other. The 
great matter is to get, as a workman expresses it, the use 
of one's hands. To become familiar, that is to say, with 
handling matters of various sorts, judging of their forms and 



240 OF DIVISION OF LABOR 

qualities, and acquiring the power of determining the move- 
ment to be given, and the habit of executing it quickly and 
accurately. When this is acquired, there is no great diffi- 
culty in the management of any common tool, if once the 
principle on which it operates be understood. Hence a good 
workman in any trade, displays comparatively but trifling 
awkwardness in applying himself to any other. Almost all 
he requires is to know how a thing is done, and to under- 
stand how the implements employed operate. This is very 
observable in the progress of new settlements in America, 
where I have seldom seen a good mechanic have much diffi- 
culty in turning his hand, as it is said, to any thing. 

Agriculture, from its nature, is the art in which the divi- 
sion of labor has made least progress. Were it possible to 
conceive that, by the operation of any circumstance, it could 
there be carried to its full extent, whether would its benefits 
be felt, in the increased dexterity of the workman, or in 
the increased efficiency of the instruments employed ? At 
present a man employed in such work, generally ploughs, 
harrows, reaps, mows, threshes, and drives as well at twenty- 
five, as at thirty-five, or forty-five. It seems not very probable, 
therefore, that, were he to confine himself altogether to one 
of these occupations, he would perform it better than he now 
does. On the other hand, it seems very likely, that, did 
the dependence of the several agricultural operations on the 
seasons permit the separation of occupations in this art, the 
implements employed in it would soon become much more 
efficient. We see, in fact, that it is the impossibility of this 
separation taking place, that does here retard or prevent im- 
provement. Threshing-mills, for example, would be univer- 
sally adopted were it not that, being nearly idle a great part 
of the time, the cost of construction is too great for the 
return. The machine is probably unemployed for nineteen 
days out of twenty, so that could this division take place 
in twenty adjoining farms, each of which has now its own 
threshing-mill, nineteen of those at present necessary might 
be dispensed with. The same thing may, I believe, be said 
concerning drilling-machines ; it is their cost and the long 
time they lie idle, that prevents their general adoption. 



OF DIVISION OF LABOR 241 

Similar causes altogether prevent the introduction of many 
other ingenious machines and implements. As much in- 
genuity, indeed, has been displayed in contrivances for the 
purposes of this art, as for any other ; but the instruments 
produced, though they would have been very effective aids 
in particular operations, have never come into use, because, 
unless for a few days every year, they would have lain idle 
on the hands of their owners. Were it possible for farmers 
to divide their employment, and, each taking to a par- 
ticular department, were the distinct occupations of ploughers, 
reapers, harrowers, etc., to arise, none of the instruments 
employed lying idle, they would yield much more speedy 
returns ; their construction, in all probability, would greatly 
improve, and the whole capital of the country would soon 
be very much increased. It is worth while observing, too, that 
in this sort of labor, the improved construction of instru- 
ments seems to lessen the quantum of manual dexterity 
necessary. The manual dexterity necessary for managing a 
threshing or a drilling-machine is very trifling. 

It is chiefly in some very delicate arts, such as that of 
watchmaking, or in some in which, from their nature, the use of 
tools cannot be extensively introduced, as in printing, that the 
efficiency derived from long practice is very great, and where, 
consequently, the division of labor would seem in this way a 
direct improvement. These, however, make but a small part 
of the arts of any community. 

2. Among the direct advantages derived from the division 
of labor, Adam Smith reckons the invention of many machines 
facilitating and abridging labor. It seems to me, that the facts 
are, on the whole, opposed to this idea. Whatever confines a 
man's faculties to one monotonous occupation, must rather dull 
and cramp, than quicken and expand them. " The under- 
standings of the greater part of men, are necessarily formed by 
their ordinary employments. The man, whose whole life is 
spent in performing a few operations, of which the effects, too, 
are perhaps always the same, or very nearly the same, has no 
occasion to exert his understanding, or to exercise his inven- 
tion, in finding out expedients for removing difficulties which 
never occur. He naturally loses, therefore, the habit of such 

Q 



242 OF DIVISION OF LABOR 

exertion, and generally becomes as stupid and ignorant as it is 
possible for a human creature to become. The torpor of his mind 
renders him not only incapable of relishing or bearing a part in 
any rational conversation, but of conceiving any generous, 
noble, or tender sentiment, and consequently of forming any 
just judgment concerning many even of the ordinary duties of 
private life. Of the great and extensive interests of his 
country he is altogether incapable of judging ; and unless very 
particular pains have been taken to render him otherwise, he 
is equally incapable of defending his country in war. The 
uniformity of his stationary life naturally corrupts the courage 
of his mind, and makes him regard with abhorrence, the 
irregular, uncertain, and adventurous life of a soldier. It 
corrupts even the activity of his body, and renders him in- 
capable of exerting his strength with vigor and perseverance 
in any other employment than that to which he has been bred. 
His dexterity in his particular trade seems, in this manner, to 
be acquired at the expense of his intellectual, social, and 
martial virtues." ^ 

These being the direct effects on the intellectual and moral 
powers of the division of labor, it can scarcely be said to be 
the direct cause of invention in the artisan. The extended 
division of labor [in modern industry, however,] implies 
the existence of many arts, and of much intelligence [in some 
of the members of the society]. Where it exists, therefore, 
the inventive faculties will be generally active. But this 
activity, though a concomitant of the division of labor, is to be 
held as an effect, not of that division, but of other causes them- 
selves producing the division of labor. It will appear, in 
short, to be, like most popular principles, a result, not a cause ; 
and ranks properly, not as a prime mover in the course of 
human affairs, but as a consequence of the actions of the prime 
movers. 

[For a much more vigorous treatment of the leading subjects dealt with 
in this Chapter the reader is referred to Lauderdale, to whom Rae is un- 
doubtedly much indebted.] 

^Wealth of Nations, Book V. c. I. 



APPENDIX. 



ARTICLE I. 

OF THE NATURE AND EFFECTS OF LUXURY. 

The general tendency of all the circumstances, the nature and 
causes of which it has been our aim hitherto to investigate, is 
to advance the wealth of society, the capital and stock of com- 
munities. Were the operation of the principles of invention 
and accumulation to go on unchecked, the amount of the stock 
of all nations would be gradually and uninterruptedly increased; 
the one furnishing the means of providing additional supplies 
for the wants of futurity, the other giving the motives to 
make the provision. But there are opposite principles, the 
tendency of which is either to retard the progress of the 
general stock, or actually to diminish the amount already 
existing. To some of these we have now to attend. 

As the prevalence of the benevolent and social affections, 
and the strength of the intellectual powers, are the great 
springs from which the increase of the wealth and prosperity 
of communities arise, so it might be expected, as I believe 
it will be found, that the diminution of that wealth is 
chiefly occasioned by the spread of contrary principles, by 
the ascendency of the purely selfish, and debasement of 
the intellectual and moral parts of our nature. 

The first of these principles, of which we have to consider 
the operation, is vanity; by which term I understand the 
mere desire of superiority over others, without any reference 
to the merit of that superiority. A perfect being may be 
desirous of superiority in well-doing, not on account of sur- 
passing others, but from pleasure in the good he does. A very 



246 APPENDIX 

evil being may derive satisfaction from a superiority in evil- 
doing, simply from the pleasure which the certainty of having 
been the cause of very great misery may give him. But there 
seems to be a feeling that finds its proper gratification in 
merely going beyond others, without reference to the path 
taken. It would be gratified by excelling in vice, were it 
not that the moral feeling restrained it ; it would be gratified 
by excelling in virtue, were it not that immoral propensities 
incapacitate it from attaining an eminent degree of it. It 
is this which, for want of a better word, I distinguish by 
the term vanity. It is a purely selfish feeling ; its pleasures 
centre in the individual; and if it does not endeavor to 
diminish the enjoyment of others, it is never directly its 
object to increase them. When, in the course of its action, 
pleasure is communicated to others, this arises from its 
being then blended with other feelings. 

Its aim, in all cases that concern our subject, is to have what 
others cannot have. One of the most perfect instances of 
it ever exhibited was when Cleopatra caused a very precious 
pearl to be dissolved, that she might consume it at a draught. 
There could be here no pleasure in the taste of the liquor, that 
must have been rather disagreeable ; the gratification con- 
sisted in having drank what no one else could afford to drink. 
The son of the famous IJoman actor performed a similar feat.^ 

We learn from Pliny ^ that it became a sort of fashion 
at Rome as it seems to have been in the East.^ 

But it is seldom that this feeling fixes itself upon objects 
that gratify it alone, or objects solely desirable from the diffi- 
culty of obtaining them, and from the consequent [factitious] 
superiority which their possession implies. It rather prefers 
such as have also qualities capable of gratifying other desires, 
or ministering to other pleasures. The amount, however, 
of these other wants supplied by the objects it covets is often 

^ Filius ^sopi detractam ex aure Metellse 
Scilicet ut decies solidum exsorberet, aceto 
Diluit insignem baccam. 
Hor. ^'a^. II. 3. The value, 1,00,000 sestertii, was equal to about £5,000. 

2 Plin. IX. 59. 

''Vis margaritarum aceto subactu. Quintus Curtius. 



OF LUXURY 247 

very small ; if this be large enough to distinguish them from 
matters altogether useless, it seems very frequently sufficient 
for its purpose. The extravagances of the table in which the 
Romans indulged were of this sort. The enjoyment afforded 
by the articles consumed must evidently have arisen, almost 
altogether, from the high price they cost. A dish of nightin- 
gale's brains could scarcely be a very delicious morsel, yet 
Adam Smith quotes from Pliny the price paid for a single 
nightingale as about £66. For a surmullet £80 were given. 
According to Suetonius, no meal cost Vitellius less than £2000. 
The enormous prices paid for various articles of dress and 
furniture could have proceeded alone from the promptings 
of similar desires. Thus Adam Smith reckons the cost of 
some cushions of a particular sort used to lean on at table, 
at £30,000. 

The things to which vanity seems most readily to apply 
itself are those to which the use or consumption is most 
apparent, and of which the effects are most difficult to 
discriminate. Articles of which the consumption is not 
conspicuous, are incapable of gratifying this passion. The 
vanity of no person derives satisfaction from the sort of 
timber used in the construction of the house he occupies, 
because the wood work is usually concealed by paint or 
something else. Again : if the effects produced by it can 
be ascertained with accuracy, the object seldom affords the 
means of sufficiently marking superiority. Thus coal is con- 
sumed for the heat given out by it, and the different quan- 
titites of heat yielded by different qualities of coal are easily 
ascertained. One scarcely, therefore, prides himself on burn- 
ing one sort, in preference to another. It is not equally easy 
to ascertain how much the marble of which his chimney 
is composed exceeds, or comes short, in the beauty, the 
variety, and arrangement, of its colors, the same sort of 
material made use of, for similar purposes, by his neighbors. 
Fancy here, stimulated by vanity, may raise the one more 
or less over the other, and according, therefore, to the strength 
of this passion will the assumed superiority be greater or less. 
Few things have qualities better fitted for the gratification of 
this passion than liquors. Their peculiar flavors and tastes 



248 APPENDIX 

are sufficient to distini>uish them, and yet afford no room 
to determine how much the one exceeds the other. The 
ima*;"intition, also, seems to have a peculiar power over the 
ormins of taste and smell, and to be able, throuirh the instru- 
mentality of habit, to brino- them to receive pleasure from 
what at tirst was indifferent, perhaps even disagreeable. 
Hence it is impossible to set any bounds to the superiority 
which one may acquire over another, from the intluence of 
this passion ; and it may almost be laid down as a general 
rule with regard to them, tliat any one that is at all drinkable, 
becomes tit for being placed at the tables of the luxurious, by 
being carried a sufficient distance from the place of its manu- 
facture. Thus, during the peninsular war, London porter was 
largely consumed in ^Spain by the very classes who, in England, 
reckon it a mark of vulgarity to drink it at all. 

It is not, indeed, to be disputed, that the rarity and costli- 
ness of the liquors, and other similar commodities consumed 
by an individual, may heigliten greatly the absolute pleasure 
he derives from thorn. This arises from a trait in the char- 
acter of man, -which we have every day opportunities of 
observing. The attention is always aroused in a greater 
degree by an object, when it excites more than one faculty. 
Two flowers together, the one having the beauty without 
the scent of the rose, and the other its scent without its 
beauty, would not afford so nuich pleasure as that plant. We 
prefer fruit that has a tine color; it absolutely tastes better. 
The taste is quickened b}' the additional stimulus which 
the eye being caught bj- the beaut}" of the color gives 
to the sensation, in the same way as a blow, long expected, is 
felt more than one coming unawares. In a similar manner, 
the mere costliness of wines, or meats, rouses the sense to 
a keener perception of pleasure, by awakening the vanity ; 
and, when the individual is conscious of being a connoisseur 
in such matters, this very potent mover of our thoughts and 
sentiments is, besides, excited by the decernment shown in the 
discrimination, and by the familiarity thence implied with rare 
wines and meats, and, consequemly, with what is called the 
best society. The sr?;ht, and, to another person perhaps, 
scarcely perceptible rel'sh which the contents of the glass. 



OF LUXURY 249 

or the dish, leaves on the palate, is seip^ed and dwelt upon, and 
being associated and wrouuht up with more exciting and in- 
tellectual delights, is fixed in the mind of the sentimental 
epicurean as something infinitely surpassing what he would 
otherwise have conceived of it. Had pearls, when dissolved 
in vinegar, produced a beverage that the imagination could 
possibly have transformed into a delicacy, how would it 
not have been extolled by the Romans 1 

The general consumption of any commodity by the vulgar 
lessens, on the contrary, in many minds, the pleasure it 
would otherwise give. It brings down the individual, in 
this particular, to a level with the lowest. This feeling 
gave rise to the exclamation by a once celebrated northern 
Duchess, "What a pity that eggs were not a sixpence the 
piece." 

The Roman moralists and satirists ground many of their 
invectives against the extravagance of the times, on the want 
of connexion between the qualities of the articles and the 
estimation in which they were held.^ Heliogabalus confessed, 
that it was the relish which the dearness of the dishes gave 
to them, that led to the extravagance of his table, and liked 
to have the price of his food overrated, because this sharpened 
his appetite. 

Were proofs wanting of how very slight grounds the taste 
has for its judgment, in declaring this to be delicious, and that 
beneath notice, we might find them in its variations in dif- 
ferent times and places. It seems only constant in preferring 
what is expensive. Yet, however different, each society in 
perfect sincerity believes its system the best. Who could 
relish now-a-days a Roman feast ? Certainly, however, they 

■^Laudas, insane, trilibrem 
MuUum in singula quern minuas pulmenta necesse est. 
Ducit te species, video. Quo pertinet ergo 
Proceros odisse lupos? quia silicet illis 
Majorem natura modum dedit, his breve pondus. 

Hor. Sat. L. II., II. 
Interea gustus elementa per omnia quajrunt, 
Nunquam animo pretiis obstantibus ; interius si 
Attendas magis ilia juvant quae pluris emuntur. 

Juvenal, XI. Sat. 



250 APPENDIX 

believoil that in cookery, as in other arts, they had attained 
the summit of real perfection. Of their oxxxl faith in this 
belief they gave a singular instance. A very expensive anil 
much esteemed sauce was made by them out of the probably 
half rotten entrails of certain iish.^ So convinced, however, 
were they of its superlative ilelicacy. that they had the care 
to make a formal law specially prohibitino- its being given or 
sold to the barbarians.- They were seriously fearful lest, 
should these rude warriors only taste it, it might so highly 
gratify their appetite, as to bring them down at once upon 
the empii-e. They came, notwithstanding, but neither they 
nor their more polished ileseendants seem to have found 
particular charms in the garum. 

We tiud the estimation of every article, whether of dress, of 
furniture, or of equipage, if to be seen by many, regulated 
also, in a very great degree, by the gratitication it affords this 
passion. " With the greatej* part of rich people, the chief 
enjoyment of riches consists in the parade of riches; which, 
in their eyes, is never so complete as when they appear to 
possess those decisive marks of opulence which nobody can 
possess but themselves. In their eyes, the merit of an object, 
which is in any degree either useful or beautiful, is greatly 
enhanced by its scarcity, or bj' the great labor which it 
requires to collect any considerable quantity of it; a labor 
which nobody can afford to pay but themselves. Such objects 
they are willing to purchase at a higher price than things 
more beautiful and useful, but more common." ^ Though its 
influence now, perhaps, is not so great as it was among the 
ancients, it is yet more apparent. The progress of art has 
been such, that there is scarcely any material, or fabric, or 
color, the production of which it does not so nmch facilitate 
as to bring it within the reach of a large mass of consumers. 

^ Aliud etiamnum liquoris exquisiti genus, quod gaium vooavere, intestinis 
piscium c;vterisque qu;v abjicieuda esseut sale maoeratis, ut sit ilia putrescen- 
tium sanies. — Nee liquor ullus prene pnvter unguenta majore in pretio esse 
ccupit. Plin. lib. 31. c. 8. Xat. His. 

-The edict was in the time of the Emperors Valcns and (^ratiau. GoUl 
and wine were laid under a similar prohibition. 
3 Wealth of Xations, B. I. c. XI. 



OF LUXURY 251 

It then loses its value as a distinction, and ceases to serve 
the purposes of vanity. Hence arises the necessity for the 
variety, and seeming caprice, of fashion. What Adam Smith 
applies to one class of articles, will apply, in a great measure, 
to the whole expenditure of the opulent. " When by the 
improvements in the productive powers of manufacturing art 
and industry, the expense of any one dress comes to be very 
moderate, the variety will naturally be very great. The rich, 
not being able to distinguish themselves by the expense of any 
one dress, will naturally endeavor to do so by the multitude 
and variety of their dresses." ^ 

To attempt to enumerate the modes in which fashion varies 
the fitness of things for the purposes of its votaries, were 
little profitable, and is, I apprehend, superfluous. Its extended 
influence will hardly be disputed. " What is the cause," de- 
mands Mr. iStorch,^ " that gives so high a value to the rare 
jewels with which opulence loves to deck itself ? Is it the 
pleasure they give the eye, by the brilliancy of their reflected 
light ? No ; that slight enjoyment has no relation to their 
value ; it is because they attest the wealth of him who wears 
them. Such are all the objects of this sort of luxury : the 
amount of enjoyment they give through the direct medium of 
the senses is nothing, in comparison of that which they yield 
by the display that can be made of them to others — even 
objects which seem by their nature to have no other end but 
to please the senses, are almost altogether estimated by the 
gratification this display produces. Consider a sumptuous 
repast given by opulence, separate from it, in thought, every 
thing that serves only to show the riches of him who gives 
it, and leave nothing absolutely on the table but what may 
gratify the appetite of the individual : what would remain ? 
In short, if we take a general survey," continues the same 
author, " of all that expenditure which is made after the 
natural desires are satisfied, we will perceive that it is almost 
altogether occasioned by the desire to appear rich."^ This 
desire of appearing superior to others thus keeps a vast 

^ Idem. B. IV. c. IX. 

2 Cours d'Economie Politique, liv. VII. c. V, 

2 Traits d'Economie Politique, liv. VII. c. IV. 



252 APPENDIX 

number of thino-s in a state of ceaseless revolution. All this 
domain is under tlie rule of fashion. 

Diruit, ledifieat, mutat quadi'ata rotundis. 

It destroys before its time, as Mr. Say complains, whatever 
it lays its hands on. "Any thing which a person has pro- 
vided himself with, to serve some useful purpose, is preserved 
as long as possible, its consumption is gradual. An object of 
luxury is of no use from the moment it ceases to gratify either 
the senses, or the vanity, of its possessor. It is destroyed, 
at least in greater part, before having ceased to exist, and 
without having supplied any real \vant ; — luxury has in 
abhorrence every proti table expense." 

The expenditure occasioned b\' this desire falls on all classes 
of society. To supply it takes a large portion of the revenue 
of what are called the middle classes [that is, of those who are 
recognized members of the middle classes], of those who have 
difficulty to prove their claim to be so ranked, of those who 
are comfortable in the lower classes, and even of those who 
have difficult}^ in procuring absolute necessaries. " In all 
classes," says Mr. Storch, " the desire of show {le luxe d'osten- 
tation) has been able to identify itself with whatever serves 
the comfort or the conveniences of life. It is this which 
borders with a narrow lace the head dress of the country 
girl, and gives to her whole attire colors and a shape foreign 
to its utility." ^ 

I should wish to apply, to the expenditure occasioned by 
the passion of vanity, the term luxurj-. Though that word 
has properly a wider signification, it is perhaps the one that 
comes nearest to mark the thing we speak of. 

It is somewhat difficult to define precise!}" how far the limits 
of luxury, so understood, extend. It is a point which, pro- 
bably", different people would fix difterentl}". Whatever 
amount of pleasure any thing gives, that is entirely distinct 
from its rarity, or any association with that circumstance, 

^ Liv. VII. c. V. [The dress of a girl has indirect as well as direct 
utilitj'. The above was written before the discovery of the principle of 
sexual selection.] 



OF LUXURY 253 

certainly is not luxury. There is a pleasure in the sight of 
certain shapes and colors, and arrangements of them, which is 
quite independent of their cost ; there is a fitness, also, in the 
texture of certain fabrics, to preserve from the extremes of 
heat and cold, to add to the beauties of feature or form, and 
to correct their defects, that, of itself, gives pleasure ; there 
are pleasures, too, which the mind creates to itself, out of the 
associations of these. We feel pleasure, in a cold day, in look- 
ing at a person well wrapped up in warm furs, as in a hot day, 
in seeing that one has no lack of clean linen. A nobleman of 
a right mind experiences gratification from seeing the clean 
sheets and warm blankets of the peasant, as well as when he 
enters and looks round his own sedulously arranged chamber. 
It is this feeling we experience when we say that such a house, 
or dress, has an air of comfort about it. The term has pro- 
perly reference to the sensual, and to the benevolent, not to 
the selfish feelings. The sight of statues, paintings, flowers, 
is also capable of affording a high degree of gratification to 
many minds. The degree of pleasure thus experienced is differ- 
ent in different individuals, and it is scarcely possible to ascer- 
tain what its exact amount is in any one ; hence the difficulty, 
in most cases, of determining what is, or is not, luxury. Mr. 
Storch, in a chapter of his system from which I have already 
quoted, observes : " All the ornaments which decorate the 
apartments of the rich, that gilt work, those sculptures which 
art and taste seem to have formed solely to delight the mind, 
are nothing but a sort of magical characters, presenting every 
where this inscription : Admire the extent of my riches." 
Vanity, there can be little doubt, is the predominating feeling 
prompting to the construction of such apartments ; it is not, 
however, the only one. Well-executed statues, even elegant 
gilding, have certainly something in themselves pleasing to 
the eye, and to the mind of the beholder, whether owner or 
guest. The larger part of the gratification derived is drawn 
probably in most cases from vanity, and we occasionally meet 
with a character whose pleasures are altogether those of 
lostentation ; like Pope's prodigal, 

1 Not for himself he sees, or hears, or eats, 

Artists must choose his pictures, music, meats ; 



254 ArPKNDIX 

Jlo Inivs for Topham drawings ami ilosigns, 
For Tombroko, statuos, dirty ^^ods, and I'oins ; 
l\aro nionkisli niannsoripts for lloarno nlono, 
And books for Moad, and b»Uti>rtlios for Sloano. 

Tnit. in most ojksos, real oujoyiuont [of an aosthetii' natniv or 
othorwiso] niixos lari;vly with nioro \anity. in i^xponilituiv oi 
the [hixuriousj soit. 

Adam Smith remarks, that " It is not by tl\e importation of 
o"old and silver that the discovery ol' America luus enrieheil 
Europe. Hy tlie abundance of the American mines those 
metals have become cheaper. A service o^ plate can now be 
purchased for about a third part of the corn, or a third part 
of the labor, which it would have ct>st in the til'teeuth century. 
With the sanie anmial expense ol" labor and connnoditios, 
Enivpe can annually ]>urchase about three tin\es the quantity 
of plate which it coidd have purchased at that time. But 
when a connuodity comes to be sold for a third part of what 
had been its usual price, not only those who purchased it 
before can purchase three times their former (luantity, but it 
is brouo'ht down to the level o)i a nuich ij^reater number of 
purchasers, perhaps to more than ten, perhaps to more than 
twenty times the former number. 80 that there may be in 
Europe, at present, not only more than three times, but more 
than twenty or thirty times the quantity of plate which would 
ha\e been in it, e\en in its present state of improvement, had 
the discovery of the American mines never been made. 80 far 
Europe has, no doubt, rained a real conveniency, thouii'h surely 
a very tritiing- one. The cheapness of gold and silver renders 
those metals rather less tit for the purposes of money than 
they were before. In onler to make the same purchases, we 
must load ourselves with a oroater quantity of them, and 
carry about a shilling in our pocket, where a groat would have 
done before. It is ditlicult to say which is most tritling, this 
inconveniency, or the opposite conveniency." ^ I suspect there 
is also a little exaggeration here, as the words of the author in 
another place would prove. " If you except iron, the precious 
metals are more useful than any other. As they are less liable 
to rust anil impurity, they can more easily be kept clean; and 
' U'to/tl, 0/ \ation.<, 15. IV. c. I. 



OF LUXURY 255 

the utensilH, either ot" tJio table or the kitchen, are often, upon 
that account, more agreeable when made of them. A silver 
boiler i.s more cleanly than a lead, copper, or tin one ; and the 
same fjuality would render a gold boiler still better than a 
.silver one " ^ But, even if we should admit that silver, as a 
commodity possessing many useful qualities, is valuable on 
other accounts than its scarcity, we nnist also grant that a 
very large share of ot?ier departments of the expenditure of 
the wealthy consists of mere luxuries, — articles, the sole grati- 
fication afforded by which is, that they alone can afford to 
possess them. It is then, I apprehend with some truth, that, 
in another part of the Wealth of Nations, the author, in 
tracing the causes which brought on the diminution of the 
power of the gi-eat feudal lords, and ascribing them chiefly to 
their expending their revenues on the produce of foreign 
commerce and manufacture, instead of maintaining a large 
retinue, characterizes the bulk of the articles constituting this 
expenditure as useless for any other purpose than the gratifi- 
cation of a selfish vanity. " All for ourselves, and nothing for 
other people, seems, in every age of the world, to have been 
the vile maxims of the masters of mankind. As soon, there- 
fore, as they could find a method of consuming the whole 
value of their rents themselves, they had no disposition to 
share them with any other persons. For a pair of diamond 
))uckles, perhaps, or something as frivolous and useless, they 
exchanged the maintenance, or what is the same thing, the 
price of the maintenance, of a thousand men for a year, and 
with it the whole weight and authority which it could give 
them. The buckles, however, were to be their own, and no 
other human creature was to have any share of them; whereas 
in the more ancient method of expense, they must have 
shared with at least a thousand people. With the judges that 
were to dcitermine the preference, tin's difference was perfectly 
decisive ; and thus, for the gratification of the most childish, 
the meanest, and the most sordid of all vanities, they gradu- 
ally bartered their whole power and authority. Having sold 
their bii-thright, not like Esau, for a mess of pottage in time 
of hunger and necessity, but, in the wantonness of plenty, for 
' Wealth of Nations, B. I. c. XI. 



256 ArrENOlX 

trinkets ami Iviublos, thtor to Iv tlio playtliinos of chiKiivn 
than the serious pui*suits of n\en. thev became as insiji-niticant 
as any suK^tantial buriilior ov traiiesman in a city." ^ Even 
heiv. t<x\ thoiv is soino oxa^^vvation ; the seat of a woaltliy 
modern nobleman exceeds the rude castle of his half lv\r- 
Iviivus ancestor, not only in the uTatitioation it oives to the 
jvi*sonal vanity of its jxv^sessor. but also in the letinod enjoy- 
n»ents it atibixls its inmates. The exact pivportion between 
the meiv luxuries and the absolute enjoyn\ei\ts, in this as 
in other oases, is indeed imjKvssible to asoortain. The former, 
however, undoubtedly n\ako a very lar^o port ion of the total 
amount. 

As wo descend in tho soalo. fi\nu tho poi'sons and mansions 
of those who have the fortune to possess heivditary wealtii 
and hereditary claims to p-x^d society, to those who have 
themselves accumulated, or are oujployod in accuniulatiuj; 
riches, and raising themselves to distinction. fi\nu thence to 
the lower grades of life. and. at last, to the nieiv drudiios of 
the community, we shall tind every step wo take marked by 
a jiivater pivminonce in two oiixnmistances. Tho amount 
expended on what ai\> neither tho nocossiirios nor conveniences 
of life beeon\es less, but that oxpeiiditure is moi'C decidedly 
mere luxury. Taste gives enjoy ujont even to tho wildest 
extravagance of those whose chief occupation htis been to 
devise means to enjoy life, and to make it agreeable to othei's ; 
but he whose business has Wen. or is, to discover the best 
means of gaining wealth, though lie may yield less to tho 
desire of show, does so more ihoixmghly. lie becomes a meiv 
imitator, and. like most imitators, is apt to ivtain all tho 
defects and to drop nuich of the graces of his copy. 

Vanity is combated by tho strength of the social and 
Ixmevolent atlections and intellectual powoi"s. The former 
i"epresent its excesses as lun-tful, the latter as al>surt.l. The 
same principles, thorefoiv. which give strength to tho otlootivo 
desire of accuunilation. diminish tho sway of this passion. 
Hence, in all societies, whei^e the odootivo dosiro of accumula- 
tion is high, and instruments consequently at oixiei's of slow 
^ Wealth o/ynttons, B. III. c. IV. 



OF iJJXCRY 257 

return, of only kept at orderH of quick return from the pro- 
^reKB of improvement, vanity and luxury w^ill prevail but 
little;' while, in Bocieties where the effective de8ire of 
accumulation is low, and instruments, not in consequence of 
superabundance of rrjaterials or recent improvements, but 
of the inability of the community to work up any but the best 
materials, are at orders of very quick return, such a state of 
things, indicating a weakness in the social and benevolent 
affections, and in the intellectual powers, is generally accom- 
panied by great strerjgth, and the general prevalence of vanity 
and luxury. 

Savages, in general, are remarkable for the influence wfiich 
vanity has over thern, and for their propensity to give up any 
provision they may have made for the future, or to suffer 
severe privations, to have the means of decking their persons 
or habitations with something rare and costly, distinguishing 
them from others. Beads, bones, plumes of feathers, porcu- 
pine quills, gay colors, and all the rarities of their native 
abodes, are sought out, and wrought up by them with great 
labor. "J'hey besides cut their flesh, or tatoo their skin. The 
operation costs severe pain and requires some skill, and the 
bearing the testimony of this outlay about with him is as real 
a gratification to the vanity of the savage as a diamond ring 
to that of an European. Their intercourse with civilized 
nations turns their desires towards fineries of European 
manufacture. Glass beads, trinkets of silver, or, if it be not 
to be had, of tin, fine cloths, showy cottons and silks, then 
make up a large part of their expenditure.^ 

^ [ThJB mamn to ))(■. ». dftbatahle pOBition. See the note at the end of this 
article. ] 

'^ I have 8een many of the Indians in Canaila, when in high dress, clothed 
in the finest English cloth, of which they are, I am told, excellent judges ; 
certainly, however, in the way they wear it, the Indian Vjlanket, one made 
thick for the purpose, with a broad blue border, makes a more convenient and 
more V>ecoming robe. 

The almost irresistible passion which these people have, for whatever they 
perceive esteemed precious by others, must have struck every one having had 
any intercourse with them. Perhaps the following anecdote may be worth relat- 
ing, as in some degree illustrative of it. I was once voyaging with a friend in a 
small canoe, when we chanced to keep company for two or three days with 

R 



238 APPENDIX 

All travellei-s speak of the vanity of the Chinese, and of 
their propensity to sliow. Their olitterino- oiKling-, variejjated 
silks, antl crispy cows' hair dyed red, with them the most 
splendid of ornaments, catch the eye of every stranger, and 
contrast sti-onoly with tlie squalid poverty and misery that is 
the constant portion of a considerable part of the population, 
and occasionally invades the whole mass. One of the father 
Jesuits, in speaking- of the necessity of his brethren changing 
their habits and style of living, observes, that, "' besides other 
I'easons, they are obliged to conform to the general custom of 
the country ; that even individuals of the common people, 
when they go to visit any one, dress themselves in silk, and 
have themselves carried in a chair. This does not pass with 
them for vanity, or affectation of grandeur, but for an evidence 
that they esteem the pei-sons whom they visit, and that they 
themselves are above absolute want, anvl are not in a despic- 
able condition.^ This attention to a showy exterior seems to 
have led Mr. Ellis to form too high an estimate of the general 
opulence and comfort of the people, '" I have been much 
struck," he says, '• in all Chinese towns and villages with the 
number of persons apparently of the middling classes ; from 
this I am inclined to infer a wiile dittusion of the substantial 
comforts of life, ami the consequent financial capacity of the 
country.'"^ 

The Romans are still more conspicuous instances of the 
extravagance into which this passion betrays nations. Vanity 
reigned throughout their expenditure. The decorations of 

some IiuUaiis in anothei-, one of whom a severe intermittent had reduced to a 
mere skeleton. One forenoon when we stopped for a little, they requested us 
to come close to them, and open a case we had, to let the sick man examine it. 
Having done as they desired, the invalid seemed sadly disappointed, "I 
thought," he said, " when I saw it at a distance yesterday, that the inside 
was silver, and it seemed to me it would do me good to look at it, but it is only 
tin."' The e.xpression of his countenance and voice sliowed that he fancied the 
sight of so much silver, would have acted like a cordial, and so I dare say it 
would. It is to be observetl that it is not the custom of Indians to make 
requests having an air of impertinence of strangers, or to express dis- 
appointment. 

> Lettres Edi/iautes, Vol. IX. p. 531. 

*£'m?)a.s>y to China, Phil, edition, ISIS, p. '237. 



Oy UJKIJIIY 25^ 

th^iir pf^rHonft and mauHionH vmrti a f-how of the most (i</Ht\y 

At'i(^.t>turu, vttatAiH (h-.tuUj muicUji tiit/Ma." 

I'he h^ad, Uu^ rieck, tlw> arm«, thue finger*, of a Borruaji La^ly 

warn hmhA with jewelii, PHrxy raWUiH thai tha yiwah whieh 
Jxjjjjii \*ii.ix\m% the wife of Caliguk, even afV^r her repadii*.- 
tipn, carried on her per»on when attired «imply for paying 
vi.Hjfc8, were worth forty milHon^ of fteKterc^sK, upwards of two 
Ijurjdnjrj thou^ari^i [x^undH wterliog, Ac^y^rdirig V^ tiie narae 
author, women of the greatest «implieity and rnodewty dur»t 
fjo more go without diamon^l« than a consul without the 
iimikh of }ii8 dignity. Tlje m/iri, al«f>^ he tellw u/i, wore on 
their fingers a variety of the most expensive rings, rather 
loa/ling th-an adorning them. It was common to hiive tables 
and other articJeh of ivory, or of the pr^jeious metaJs. Tiie 
l>)-at<i and tables of HeliogabalLW were of pure gold. Examples 
of their excessive luxury in articles for the table liave been 
aJrea/ly given, and niany more might be adde^i, were it rxeces- 
sary to repeat wliat lias been often njarrated.^ 

i'he magnificence of the east^jrn Enjpire wa^ perliaps even 
great<;r tlian thjat of liome itseJf. It reflf^weUjd womething of 
tlie excessive splendor of the Babylonish arid other Asiatic 
monarchies. Chrysost^^m thus describes the palaces of the 
rir>bles, " The ro^jfs ma/le of wood were gilt. The doors, even 
the long folding d<)Oi'H, wtiia of ivory. In all the chambers 
the walls were incrusted with nmrble. If they were only of 
c/mimon stone, it was covered with plates of gold. The Yxiaum 
and ceilings were gilt, and the apartments were inkid with 
small stones, and often with precious stones. Over tlie floors 
were sometimes spread very rich carpets. Their taste for 
j/uignificence could bear nothing of the ordinary kind. In 
tlie rooms were great pillars of rnjarble, with their chapiters 
gilt, and sometimes the whole pillars were gilt, statues by the 
most excellent artists, pictures and mosaic work. The beds 
were usually of ivory or of wood, gilt or covered with silver 
plates, and sometimes of sf;lid silver decorated with gold. All 

I The reader ujay cooeult Giblx/n, or the work of M. d'Araay wr to »^ 

'/friv4e <Jm Rwn/tAriM. 



260 APPENDIX 

the furniture was surprisingly rich. The chairs and benches 
were of ivory ; the pots and other vessels, even for the 
meanest uses, were of gold and silver."^ 

Mr. Say has remarked, that there is a large part of the 
consumption of the French, which is occasioned by their 
excessive attention to mode and fashion, and that, in this 
respect, they contrast disadvantageously with the English, 
who pay more attention to comfort and convenience, and less 
to the changing fancies by which vanity seeks to distinguish 
itself. Instruments have never, in France, been wrought up 
to orders of so slow return as in England. 

I believe it will be found that the strength of the effective 
desire of accumulation, is higher among the working classes 
in North America than in Europe. The influence of vanity in 
many cases, is certainly less. The consumption, for instance, 
of coarse unbleached cotton, for shirting, is very great ; this is 
certainly a more comfortable wear for a working man than 
the finer sorts. It washes more easily, and endures more 
fatigue.'^ The finer cottons, also, of American manufacture, 
are of a stouter and more substantial fabric, indicating that 
the American purchaser looks more to the wear of the article, 
the European to the delicacy of the fabric. The same thing 
may be said of woolens. A substantial farmer in England would 
scarcely, as one of the same class in North America, think him- 
self decently clad in a winter's suit of which the cloth cost only 
a dollar per yard, though a comfortable and durable dress. 

It is to be observed, that, as vanity is opposed by the social 
and benevolent aflections and intellectual powers, according as 
the one or the other of these preponderates, the manifesta- 
tions of that luxury which yet remains, are modified into 
some resemblance to what it approves. When the intellectual 
powers are strong, this passion endeavors to elude them by 
attaching itself to objects that it can represent as of per- 
manent excellence. When the benevolent affections are 

^ Chrysostom, quoted by Jortin, Ecclesiastical History, Vol. II. p. 359. 

- Until about two years since almost all upper Canada and the eastern town- 
ships of lower Canada, were supplied with American cottons of this sort 
smuggled over. Patterns were sent to Manchester, and imitation American 
cottons got out, which now supply the Canadian side of the line ; they do not, 
however, as far as I have been able to learn, pass to the other. 



OF LUXURY 261 

powerful, it endeavors to gain its ends, by representing them 
as proceeding from a wish to gratify others, and to share with 
them things, which are at least generally esteemed rare and 
valuable. In the former case it escapes opposition, and finds 
vent in expensive buildings and decorations ; in the latter in 
sumptuous entertainments, and luxuries of the table. " In 
Holland," says Mandeville, " people are only sparing in such 
things as are daily wanted and soon consumed; in what is 
lasting they are quite otherwise ; in pictures and marble they 
are profuse ; in their buildings and gardens they are extrava- 
gant to folly. In other countries you may meet with stately 
courts and palaces of great extent that belongs to princes 
which nobody can expect in a commonwealth, where so much 
equality is observed as there is in this ; but in all Europe you 
shall find no private buildings so sumptuously magnificent, as 
a great many of the merchants' and other gentlemen's houses 
are in Amsterdam, and some other great cities of that 
province, and the generality of them that build there, lay out 
a greater proportion of their estates on the house they dwell 
in than any people upon the earth." ^ Something of the same 
genius may, I think, be observed in the expenditure of the 
North Americans. Their houses are frequently larger than 
they have use for, so that part of them remains unoccupied. 
They are, also, often built with a greater regard to show than 
comfort. There is little substantial difference between a gold 
and silver watch, but that the former costs double of the 
latter. Gold watches are perhaps more common in North 
America, than in any other part of the world. It is pure 
vanity that leads to so general an adoption of this luxury, by 
classes who in England would not think of it, but it is a 
vanity that fixes itself on something permanent. In the end, 
there is no cheaper way in which man can write, " I am rich, 
or at least, I am not absolutely poor," than to carry a gold 
watch. It is ready to meet all occasions, and all persons.^ 

1 Remark Q, Fable of the Bees. 

^ These observations apply to the population of British descent or birth 
on both sides of the line. [Rae overlooks here that the possession of a gold 
watch, or any sort of valuable jewelry, constitutes a hoard of wealth which 
may be of great use in certain emergencies. It is like the gold chain of the 
knight of the Middle Ages, of which he speaks elsewhere.] 



262 APPENDIX 

In Britain, on the other hand, tlie hix\iries that mix them- 
selves with tlie virtues of hospitaHty are more apt to prevail. 
There rare wines, and refinements in the dainties of the table 
are more common. 

Besides the varied character with which the various 
strength of the passion stamps diiferent peoples, there is a 
difference, in this respect, in the same people, between the 
agricultural population and the inhabitants of cities, which 
the following sagacious remarks of Montesquieu seem to me 
sufficiently to explain. " The extent of luxury farther de- 
ponds on the size of towns, and especially of the capital. In 
proportion to the populousness of towns, the inhabitants are 
filled with notions of vanity, and actuated by an ambition of 
distinguishing themselves by trifles. If they are numerous, 
and most of them strangers to one another, their vanity 
redoubles, because there are greater hopes of success. As 
luxury inspires these hopes, each man assumes the marks of a 
superior condition. But, by endeavoring thus at distinction, 
every one becomes equal and distinction ceases : as all are 
desirous of respect, nobody is regarded." ^ 

In the coiuitry it is difi'erent; every one is known, and no 
one can succeed in passing himself off for other than he is. 
In town Molly Seagrim would have been admired as a 
fantastical fine lady ; in the country she got herself mobbed. 
To account for the difi'erence, which we every where see 
between the dissipation of the town and the economy and 
frugality of the country, we have only to consider, in addition 
to this, that in the country there are always considerable 
facilities and encouragements, for even the poorest to form 
instruments, unless in very anomalous cases, such as that 
which the abomination of the poor laws lias introduced into 
England. In the country the poor man can devote all his 
spare time, which perhaps is his only disposable [savable] 
fund, to the cultivation of some plot of grouml, to repairing 
his house, working in his garden, and procuring food for his 
cow or his pig. He is induced and enabled to place out- all 

^Esprit des Loix, B. VII. c. II. 

"One who has happened to reside in any part of Scotland, where facilities 
of this sort e.\ist, must have had opportunities of observing very remarkable 



OF LUXURY 263 

his little savings, as they come in, on some profitable invest- 
ment. Similar circumstances operate similar effects on the 
man in middling circumstances, and even on the rich man. 
It is the town, especially the metropolis, that is the ruin of 
landed proprietors. 

We may also, in a similar manner, explain the tendency of 
new countries to engender industry and frugality. The very 
scattered state of the population effectually keeps down 
vanity ; the absolute necessity of working up the materials 
within reach, rouses the accumulative principle to action, and 
the abundance of these materials stimulates it to unremitting 
exertion. There is hence no better school for the dissolute 
European than the back woods. After a dozen years' resi- 
dence in them, or in the clearings to which he has helped to 
convert them, he comes out a completely altered man. 

It is perhaps proper to observe here, that no blame can 
attach to individuals, for compliances [within reasonable 
bounds] with the follies to which the passion of vanity 
prompts. It were a great mistake to imagine that even its 
absurdities are easily avoidable. It is in vain for any one 
man to oppose general opinions and practices, however 
ridiculous. If he does so, he is sure to encounter greater 
evils than a compliance with the customs of the society would 
inflict. It is the business of the poor man to stand well with 
the world, else he would scarcely make his way through it. 
It is his business, too, to avoid a display of poverty. One is 
sure to have most friends when they least need them. " Pour 
s'^tablir dans le monde," says Rochefoucauld, " on fait tout ce 
qu'on peut pour y paroitre ^tabli." 

instances of the indefatigable industry they excite. Tracts of land, so very 
barren and impracticable as to seem condemned to perpetual sterility, may 
be seen in process of being converted into fertile soil, by being let out in small 
patches at very long or perpetual leases. A portion of the estate of Pilfoddles, 
near Aberdeen, almost a continuity of rock, was, I recollect, so reclaiming 
about fifteen years ago. Those small feus, as they are termed, are taken by 
laborers, who work on them at spare hours when their other occupations fail 
them. 

[This sort of procedure is the original and elemental method of "accumula- 
tion" or growth of capital. "Saving" proper, or the putting by of funds in 
the form of money to be either expended in hiring labor or in buying titles to 
property (" investing" proper), is an historical category.] 



264 APPENDIX 

" Notwithstanding my poverty," writes a Jesuit missionary 
from China, " I have yet been able to relieve the extreme 
misery of two poor Christians. The one had his house, his 
furniture, and his implements of trade, destroyed by tire. 
The other was by profession a physician, and some thieves 
had in the night carried off his silk dresses ; they might as 
well have stolen his profession and his reputation ; for here a 
physician, unless dressed in silk and cow's hair, passes for 
ignorant, and is employed by no one." The doctor who had 
lost his silken robes was probably w^orse off than the mechanic ; 
the former was still in a condition to find work, the latter was 
not. He probably, indeed, had nankin left ; but had he 
dressed in it, especially had he pretended to say it was the 
more comfortable wear, he would have acted about as wisely 
as w^ould a poor young M.D. in England who should, in cold 
winter days, attire himself in dreadnougiit. Who would trust 
a case to so absurd a mortal ? 

The man of independent fortune, again, though he need fear 
no very serious evils from setting himself in direct opposition 
to received modes of extravagance, will yet certainly incur 
the charge of eccentricity, perhaps of niggardly parsimony. 
These are small inconveniences, but he consults his ease in 
avoiding them. 

A person is then only properly guilty of inflicting an injury 
on the community, w^hen he runs into both acknowledged 
extravagances and real luxuries. He is censured by some, but 
envied and followed by others. An individual may, on the 
other hand, somewdiat advance the prosperity of the w^hole 
society, or at least of the order in it in which he is himself 
ranked, by checking his vanity w^hen it urges him to adopt 
luxuries, permitted to his fortune, though not demanded by it. 
The nobleman who, in equipage and lackeys, keeps somewhat 
within the limits which his revenues would aftbrd ; the trades- 
man's wife, who dresses in calico instead of silk, are both, to a 
small extent, public benefactors. Luxury, indeed, generally 
advances or ^recedes slowly, and can scarce be successfully 
encouraged or opposed but by degrees. There is always, and 
in every society, one line, to go beyond which is acknowledged 
extravagance, and another, mt to come up to which is ac- 



OF LUXURY 265 

counted sordid parsimony. Crassus was ashamed to use some 
of his plate, the cost, even to him, appeared too great. ^ It is 
invidious to run to expenses which others cannot follow, and 
his guests would have felt themselves too much outshone. He 
would have been more severely censured, had he ventured to 
entertain them in the simple style of their ancestors. 

It were very difficult to discover a society where vanity 
does not more or less direct the necessary expenditure. Could 
this be done, we should there find things estimated solely by 
their physical qualities, and as these differ greatly, there would 
be great differences in the estimate made of each. Whatever 
could really set forth to advantage the beauty or grace of 
form or feature, would be proportionally prized, as would real 
beauty in articles of furniture, and in the form and decorations 
of apartments. But under this supposition, other circum- 
stances being equal, that would always be preferred which 
was cheapest. If two articles, therefore, were presented, of 
which the one was of much greater real beauty than the other, 
but also much more expensive, though it might be that the 
former would be preferred, its high cost would be esteemed a 
defect, and would proportionally diminish the pleasure yielded 
by it. Very expensive articles would, if possible, be avoided. 
A very costly dress, for instance, would affect the mind of 
such spectators disagreeably, as auguring either a want of 
taste, or a want of beauty in the wearer, requiring much 
adventitious aid to help out the deficiency. It would produce 
a disagreeable feeling, somewhat similar to that caused by the 
view of a profuse expenditure of animal power, bringing about 
only a small effect, and impressing, therefore, with an idea of 
defective mechanism. In such a society the notions of most 
people, and therefore the general rules of conduct, would in 
this respect be completely different from what they generally 
are. 

Sometimes, though rarely, this passion instead of leading to 
dissipation [of industrial energy], has an effect similar to an 
enlarged providence, and causes the formation of instruments 

^ L. vero Crassus orator duos scyphos Mentoris artificis manu caslatos — 
sestertiis C. — Coufessus tatnen est, nunquam se his uti propter verecuiidiam 
ausum. Plin. Hist. Nat. XXXIII. c. 11. 



2QQ APPENDIX 

of slowly returning orders. This is chiefly remarkable in 
buildings intended to be permanent. If the materials and 
workmanship of these are not substantial, and such as insure 
durability to the edifice, the defect is commonly perceptible, 
and is ridiculed as proceeding from poverty, or from dread of 
expense. The vanity of the rich man, therefore, here excites 
him to work for succeeding generations, that he may give the 
present a high idea of the extent of his resources. He besides, 
in this way, hopes to make it apparent to his contemporaries, 
that a monument of his prosperity and magnificence will 
descend to future times. The same observation will apply to 
public works undertaken by a proud and extravagant govern- 
ment. Vanity is always an operator in their formation, and 
therefore their construction is never altogether regulated by 
the [prevailing or standard] strength of the accumulative 
principle, nor are they instruments of the orders which it 
would indicate. " The proud minister of an ostentatious court 
may frequently take pleasure in executing a work of splendor 
and magnificence, such as a great highway, which is frequently 
seen by the principal nobility, whose applause not only flatters 
his vanity, but even contributes to support his interest at 
court. But to execute a great number of little works, in 
which nothing that can be done can make any great appear- 
ance, or excite the smallest degree of admiration in any 
traveller, and which, in short, have nothing to recommend 
them but their extreme utility, is a business which appears in 
every respect too mean and paltry to merit the attention of so 
great a magistrate. Under such an administration, therefore, 
such works are almost always entirely neglected." ^ It is, how- 
ever, to be observed, that in regulating public works, and other 
public aftairs, men ought to pay more attention to the concerns 
of a distant futurity than in the management of their private 
affairs. A century is a small part of the existence of a nation, 

^ Wealth of Nations, B. V. c. I. [The above statement in respect to "little 
works " has little applicability under present day conditions of government in 
Western Europe and America. One of the leading drains everywhere on 
public resources is the great multitude of petty undertakings extravagantly 
carried out. The appropriations for really great public works, for buildings 
which should indeed have "splendor and magnificence," are frequently unduly 
cut down because the revenue of the state has been thus frittered away.] 



OF LUXURY 267 

though it includes that of several generations of individuals. 
In statesmen, therefore, in the affairs of states, the accumula- 
tive principle should be strong. Great durability, consequently, 
in public works, is always desirable. In like manner govern- 
ments should borrow on different principles from individuals. 
No one, for instance, now disputes that it should have been the 
policy of Great Britain to have borrowed as much on long 
annuities as possible. The misfortune is, that statesmen 
generally think of themselves more than of their country, 
and instead of grappling with present evils, let them grow, 
content if they grow quietly and imperceptibly, and do not 
threaten to deprive them of the gratification of maintaining 
the pride of their power for a few years' political triumph. 
This consideration may in part explain the cause of the great 
durability of public works in China. It shows that the 
paternal character of the government is in some measure a 
reality. I suspect, however, that the contrast between the 
construction of public and private works there, is more 
apparent from the diminishing strength of the accumulative 
principle in that great Empire. I shall presently have occasion 
to adduce some reasons for this conjecture. 

It is perhaps here worthy of remark, as serving to show 
that ostentation and extravagance have very little connexion 
with any other species of enjoyment, but that which places its 
gratifications in some superiority over others, that in propor- 
tion as nations are addicted to vanity and luxury, their range 
of bodily enjoyments seems to become less. Cleanliness, for 
instance, may be said to be a refined sensuality ; it is a real 
enjoyment, on which the self -mortified ascetic wastes not his 
care ; and we find that least attention is paid to it by the vain, 
and most by the provident, so that other things being equal, 
where the effective desire of accumulation is high, there it 
is most scrupulously observed ; where it is low, it is little 
regarded. 

The North American Indians seem really not to have any 
notion of its existence. It appears to them, in other people, 
as an affected and unaccountable scrupulosity.^ The Chinese 
are described as disgustingly filthy. The Romans were cer- 

^ See " Note J " in the Appendix. 



268 APPENDIX 

tainly, as may be gathered from various passages in the 
Latin writers, far from being what we would esteem cleanly. 
An English gentleman would not think of writing to his 
friend that if he dined with him he should find well-washed 
dishes. 

Ne non et cantharus et laux 

Ostendat tibi te ; ^ 

Horace introduces a fanciful epicure, complaining of unwashed 
goblets, want of table napkins and sawdust, as taking away 
from the pleasures of a sumptuous feast.^ In modern times 
Holland has been esteemed the country of cleanliness ; Eng- 
land perhaps ranks next. 

Improvement can never facilitate the production of mere 
luxuries. It cannot do so because it is not the thing itself, 
but merely the quantity of labor embodied in it that vanity 
prizes. Diminish the labor necessary for its production, and 
you take away what this passion covets. It will, therefore, 
[thereafter] either consume a proportionally larger quantity 
of the commodity, or will turn itself for its gratification to 
other commodities of greater rarity, which a greater amount 
of labor, or some equivalent to it, is necessary to purchase. 

Pearls, as ornaments, probably derive nearly their whole 
value from their scarcity. Reduce their price to one half, and 
the quantity worn to produce the same effect would require to 
be doubled. Render them obtainable for a trifle, and they 
could be no longer worn. It has been more than once 
attempted to cultivate them, that is to make the oyster that 
produces them, bear them universally and plentifully. Lin- 
neaus conceived it practicable by pricking the animal, and 
other managements, but the scheme has never succeeded. 
Had it done so fully, it had certainly been useless. Suppose 
it had diminished the labor necessary to procure them by one 
half, then a lady to be as richly dressed as before, would just 
have had to carry double the number. Had the facility been 
farther increased, so that they became as plentiful as glass 

1 Hor. Epist. Lib. I. V. 

-Sat. IV. L. II. The Romans, it is true, bathed frequently, but then they 
had neither soap nor linen, and woollens were high priced. 



OF LUXURY 269 

beads, they would then have become as useless. If every 
peasant girl could afford to have a string of them, no lady 
would wear them, and when ladies ceased to wear them, 
peasant girls would lay them aside.^ It is the same with all 
other articles that are mere luxuries. As they only serve for 
marks of the riches of the individuals possessing them, every 
diminution made in the labor embodied in them diminishes, in 
a proportionate degree, their fitness for the purpose for which 
they are employed. Should topazes become as plentiful as 
cairngorms they would be no more esteemed. 

There are few commodities, however, in which utility, as well 
as vanity, has not a considerable share. On such the effects 
of improvements are twofold. As far as they possess inherent 
utility, it tends to carry them first, and subsequently all other 
instruments in the society, towards the more quickly return- 
ing orders. In so far again as they are mere luxuries, it 
renders a greater quantity of them necessary, or unfits them 
altogether for the supply of the demands of vanity. There is 
hence a sort of strife between the two principles, the one 
seeking to disparage and discard such commodities, the other 
to retain them. The result seems mainly determined by the 
proportion of the one, or the other sort of qualities, existing 
in the article in question, and by the degree in which its con- 
sumption is apparent. It may have so many useful and 
agreeable qualities, that however easily obtained, or however 
openly consumed, it cannot be driven out of use. All that 
vanity can do with regard to such articles, is, to consume 
them when they are most scarce. Some of the Eomans never 
ate fish but when at a distance from the sea, nor flesh but 
when on the sea- shore. Green peas become luxuries at 
Christmas. Should the best flannel cost only two pence a 
yard, it would still be worn by all who now wear it, and by 
many who do not. Its consumption is not conspicuous. On 
the contrary, were any particular fine fabric of cotton 
at present used for gowns, and costing two shillings per 

1 " The price of pearls in modern times has very much declined ; partly, no 
doubt, from change of manners and fashions ; but more probably, from the 
admirable imitation of pearls that may be obtained at a very low price." 
McCuUoch's Dictionary of Commerce. They are also less worn. 



270 APPENDIX 

yard, in consequence of improvement to be sold for two 
pence per yard, it could no longer be worn. It would no 
longer be dress for any rank, and its consumption would 
therefore diminish or cease. About ten years ago, what are 
called leghorn bonnets were fashionable and much worn in 
Canada and the United States. They then cost three or four 
pounds. They may be had now for a few shillings, and 
no one wears them ; straw which were then disused but by 
the less wealthy, are now preferred ; they are dearer and less 
durable. 

People who regard appearances, and are accustomed to see 
and be seen, can scarce expect that any improvement will 
materially diminish their yearly outlay for dress, for them- 
selves or families. Whatever proportion of their revenues 
they may have found it necessary so to expend, in order to 
maintain the appearance their rank required, they may fairly 
reckon they will have to expend in future. The gentleman, 
the tradesman, the lady, the servant girl, must alike obey the 
laws which the strength of this principle imposes on the 
society. Whatever advance improvement may make, they 
must still lay their account with being looked down on by 
their respective associates, or having to wear garments just as 
expensive as ever, without being better looking, or more com- 
fortable, in a degree answering by any means to the facilities 
of fabrication effected by the successful eflbrts of invention. 
In so far as their dress is a mai'k of their riches, a sort of in- 
scription they bear about with them, as Mr. Storch expresses 
it, serving to impress others with a belief of their possessing 
a certain amount of wealth, or holding such a i-ank in society, 
it is exactl}'" analogous to coin. Double the faculty of pro- 
duction, the quantity carried about, to answer the same 
purpose, must be doubled, or recourse nmst be had to some 
other material. Purple or scarlet, served among the Romans 
for a mark of this sort ; only the rich could atibrd to wear it. 
Although still admired as a color, it no longer serves the pur- 
pose, and is comparatively little used. Lace, among the 
moderns, was once a mark of the same kind. Invention has 
so far facilitated the production of some sorts of it, that the 
wearing; them no lonp-er confers distinction. Increase that 



OF LUXURY 271 

facility, till a yard of the finest sorts may be had for a few 
half pence, and it is questionable if the beauty of the fabric 
would preserve it as an article of dress wearable by any one.^ 

To articles of furniture, of diet, to the equipage of the rich, 
and to the whole apparent expenditure of every class, similar 
observations will apply. A greater or less part of the effects 
of improvement, is absorbed by vanity in them all, and conse- 
quently lost. 

In as far again as any article is not a luxury, in as far as 
it is beyond the reach of vanity, and consumed to supply 
some real want, not to display superiority, in so far improve- 
ment is really felt. Were invention to discover some sub- 
stance having all the properties, and the exact appearance 

1 " At Honiton, in Devon, the manufacture had arrived at that perfection, 
was so tasteful in the design, and so delicate and beautiful in the workman- 
ship, as not to be excelled by the best specimens of Brussels lace. During 
the late war, veils of this lace were sold in London from twenty to one 
hundred guineas ; they are now sold from eight to fifteen guineas. The effects 
of the competition of machinery, however, were about this time felt ; and in 
1815, the broad laces began to be superseded by the new manufacture. Steam 
power was first introduced by Mr. Jahn Lindsey, in 1815-16 ; but did not 
come into active operation till 1820. It became general in 1822-23 ; and a 
great stimulus was at this period given to the trade, owing to the expiration 
of Mr. Heathcoat's patent, the increased application of power, and the perfec- 
tion to which the difi'erent hand frames had by this time been brought. A 
temporary prosperity shone on the trade ; and numerous individuals — clergy- 
men, lawyers, doctors, and others — readily embarked capital in so tempting 
a speculation. Prices fell in proportion as production increased, but the 
demand was immense ; and the Nottingham lace frame became the organ of 
general supply, rivaling and supplanting, in plain nets, the most finished pro- 
ductions of France and the Netherlands. Lace, having become a common 
ornament, easily accessible to all classes, has lost its attractions in the fashion- 
able circles, by which it was formerly patronized, so that very rich lace is no 
longer in demand. And many articles of dress, which in our drawing rooms 
and ball rooms, lately consisted of the most costly and tasteful patterns in 
lace, are now either superseded or made of diiferent manufacture. — Many of 
the embroiderers in Nottingham are at present unemployed ; and even for the 
most splendid and beautiful specimens of embroidery, some of which have 
occupied six weeks, working six days a week and fourteen hours a day, the 
young women have not earned more than one shilling a day. The condition of 
the plain lace workers is still more deplorable — they cannot obtain more, on 
an average, than two shillings and six pence a week, and working twelve or 
fourteen hours per day, for their anxious and unremitting labor." — McCuUoch's 
Dictionary of Commerce. 



272 APPENDIX 

of good leather, and capable of being formed for one sixth of 
the outlay, it would be an effort of that power very sensibly 
felt. Boots would probably indeed cease to be worn by the 
higher classes, unless when on horseback, but good shoes 
cannot be dispensed with by any class. They are worn for 
comfort, not for show, and the diminution in the outlay neces- 
sary to procure them, would constitute a real improvement. 
Improvements in mining and modes of transporting coals, 
diminishing the labor necessary to bring them to market, are 
also sensibly felt, they facilitate the supply of real wants 
and move instruments towards the more quickly returning 
orders. Improvements in the manufacture of iron, also escape 
vanity and are real. Could ingenuity discover a method of 
quarrying stones and reducing them to shape, or of making 
bricks at one half of the present outlay, it would be a real 
improvement : only a small part of it would be lost in vanity ; 
for, unless in the highest classes, a dwelling-house is much 
more for comfort than for show. Could the substance of 
potatoes be converted into an article exactly similar to 
wheaten flour, and requiring only half the outlay, that would 
also be a very great improvement. Improvements, too, in the 
fabrication of articles of glass, and earthen ware, are in a 
great degree real. Could the manufacture of plate glass be 
so facilitated, that it might be had for only double the price 
of common window glass, the substitution of the one for the 
other could not be called a luxury, but a real improvement, 
an increased provision for the supply of future wants. In 
Great Britain ingenuity has succeeded, in recent years, in very 
greatly facilitating the manufacture of cotton fabrics. The 
increased facility of production has in part effected a real 
improvement, but certainly has in a great measure also been 
absorbed by vanity. Much less labor is now necessaiy to 
produce articles of dress of this material which are not seen, 
or are but little seen ; but for dresses worn in public, the 
expenditure is certainly not diminished, or the beauty or 
comfort of the article increased, in proportion to the increased 
facility of production. The finer sorts of these stuffs are 
perhaps produced with ten times the facility they were 
twenty years ago, yet probably the whole annual expenditure 



OF LUXURY 273 

which a young female makes for such part of her apparel as 
is formed of these stuffs, is little less than what her mother, 
twenty years ago, was accustomed to make, and certainly she 
is not ten times more becomingly or more comfortably clad. 
The great cheapness indeed of even the finest and most 
"delicate of these fabrics, is such that vanity seems to be 
discarding them. The utmost efforts of ingenuity can 
scarcely embody a sufiiciency of labor in them, or vary 
them so as to make them a fit full dress for even a trades- 
man's wife. 

All luxuries occasion a loss to the society, in proportion to 
their amount. The industry employed in their formation, 
generates no provision for future wants, and may be said to 
be expended in vain. Taking the whole society as a body, it 
supplies no wants. It gives no absolute enjoyment, it is all 
relative ; as much as one is raised by it, another is depressed, 
the superiority of one man being here equivalent to the inferi- 
ority of another. To increase the facilities of production of 
luxuries, therefore, brings no addition to the absolute capital. 
It is precisely analogous to increasing the facilities for the 
production of the metals used for coin, merely adding to the 
bulk circulated, and not enabling it in any degree to perform 
its office better. The expense, too, occasioned by keeping up 
the circulation of the one and the other, and consequent dimi- 
nution of the national revenue, is equally a loss. It is much 
greater, however, in the case of luxuries than of coinage, 
because the whole amount of the former, in all societies, is 
probably much greater than that of the latter ; and because 
it consists, in general, of materials far more easily destroyed. 
To the loss thus occasioned by vanity the term [economic] 
dissipation may be applied. Its amount cannot, for reasons 
already stated, be easily ascertained, nor is it necessary for 
our purpose that it should. It is sufficient to observe, that, 
in all societies which have hitherto existed, it has been con- 
siderable ; and that it seems to be determined, in every society, 
by the strength of the selfish, and weakness of the intellec- 
tual powers and benevolent affections; and, consequently, 
that it is inversely as the strength of the accumulative 
principle. 



274 APPENDIX 

Though vanity, in this way, operates directly to retard the 
increase of the stock of the society, some of its indirect effects 
have, notwithstanding, an opposite tendency. As an antago- 
nist to the restraining influence of the spirit of imitation, it 
is often a very useful auxiliary in the spread of inventions. 
These, without its aid, might perhaps have been shut up in 
the countries where they were discovered ; certainly they 
would not have passed from region to region, so rapidly as 
they have sometimes succeeded in doing. Under the guise of 
foreign rarities, and consequently luxuries, they have made 
their way easily ; and the mask rubbing off in time, a 
substratum of utility has been found under it.^ 

Soap seems to have been first made in the midst of the 
ashes and tallow of Germany and Gaul. It came to Rome as 
a luxury, in the shape of a pigment for the hair. In the 
course of time, its superior detergent qualities becoming- 
apparent, and the manufacture being introduced, this article 
so essential to the comfort of the modern European, passed 
entirely out of the rank of luxuries. Vanity also brought 
silk to Europe. At first it was almost entirely a luxury. 
As a garment it often has more beauty than [material of] 
any other texture ; but when it exchanged for its weight in 
gold, its beauty must have constituted but a small part of 
the enjoyment derived from the wearing of it. In some 
fabrics it is now scarcely a luxury ; its qualities of durability 
and beauty seem to give it a real superiority, sufficient to 
render the superior price paid for it no dissipation. Increase 
that facility very much, and some of these fabrics would be 
[altogether] discarded by vanity, [but retained by true 
economy]. Were velvet to become as cheap as cloth, it would 
not be worn by the higher classes ; its greater durability 
would make it too economical for them, and its adoption 
by the lower would render it vulgar. Fabrics of cotton were 
at first luxuries. They would not, perhaps, have been worn 
[at all in Europe] had they not had rarity, and consequently 
vanity, to recommend them. Cashmere shawls are so now ; 
in time they too may cease to be so. The process, indeed, 
has made some progress in France, where, I have been told, 

^[Compare Article VIII., p. 415.] 



OF LUXURY 275 

the breed of the animal yielding the wool has been introduced, 
and the manufacture considerably advanced. 

Vanity, also, [besides aiding in the spread of established 
arts] sometimes facilitates [the creation of wholly new forms 
of] real improvement, by the high estimate it gives to articles 
that are mere luxuries, but which contain the rudiments of 
extensive utility. It thus stimulates invention to facilitate 
their production, develop their utility, and put them out of 
the class of luxuries. 

Glass was at first a pure luxury. It was prized by the 
Romans for show, as glass beads are now by savages. Ingenuity 
at length perfected the various processes of the manufacture, 
and made it an article extensively supplying real wants. 
The diamond is at present chiefly a luxury ; should art ever 
succeed in giving at will a crystalline structure to simple 
carbon, so as to convert it into that substance, it would 
pass from the rank of luxuries, and would, too, contribute 
largely to the supply of real wants. The high estimation in 
which it is held serves at present to turn the attention of 
ingenuity strongly to such a project. 

These, however, are indirect, and, as it were, accidental 
effects of luxury ; its direct operation is always to dissipate 
a part of the national funds proportioned to its strength. 

The different effects arising from the action of the inventive 
faculty, as it operates on utilities or luxuries, afford a means 
of distinguishing the one from the other. The progress of in- 
vention extends the consumption of utilities ; it diminishes the 
consumption of pure luxuries. Were steel, platina, or plate 
glass, produced by one tenth of the labor they presently cost, 
their consumption would be very much increased. Were 
pearls, or lace, to be got for one tenth of the labor that must 
now be given for them, they would go completely out of 
fashion. The additional amount of utilities produced, occupy- 
ing the place of instruments that cost more labor, and did not 
return more abundantly, their consumption implies a diminu- 
tion in the cost of the whole stock of the society as compared 
with the returns made by it, and consequently the progress 
of that stock to an order of quicker return. The facility 
given to the production of luxuries has rather a contrary 



276 APPENDIX 

effect, exciting to the greatest outlay of labor of which the 
accumulative principle is capable, previous to the abandoning 
of the manufacture. 



[In the last few pages of the foregoing Article, Rae takes some account of 
the indirect and contingent effects of luxury (as elsewhere of wars, persecu- 
tions, and the like), but he does not carry this line of speculation far enough. 
His handling of the subject as a whole is, consequently, much inferior to that 
of Hume and some others. It may be said, I think, to lack generosity ; and 
hence its error. Such a sweeping indictment cannot issue against the whole 
human race. 

Rae's teaching here, on its purely economic side, needs to be supplemented 
by the following from Bagehot's Economic Studies, London edition, 1880, 
p. 172. 

' ' But we must observe what is incessantly forgotten, that it is not a 
Spartan and ascetic state of society which most generates saving. . . . With- 
out the multifarious accumulation of wants which are called luxury, there 
would in such a state of society be far less saving than there is. If you look 
at the West-end of London with its myriad comforts and splendors, it looks at 
first sight like a mere apparatus for present enjoyment. And so far as the 
present feelings of those who live there go, it often is. Very many of the 
inhabitants are thinking only of themselves. But there is no greater benefit 
to the community for all that than this seemingly thoughtless enjoyment. It 
is the bait by which the fish is caught ; it is the attraction by which capital 
is caught. To lead a bright life like that, at least that his children may lead 
it or something like it, many times as many as those who now live it, spare 
and save."] 



ARTICLE II. 

OF EXCHANGE BETWEEN DIFFERENT COMMUNITIES 
OF COMMODITIES WHICH MINISTER TO LUXURY. 

When luxuries, the produce of foreign art, present them- 
selves to a society, where they had before been strangers. 
their [true] value cannot be [readily] ascertained by compar- 
ing them with commodities of domestic formation, for it is 
not indeed the really useful qualities of commodities [which 
are readily comparable], that fit them more or less perfectly 
to gratify the passion of vanity, but solely the difficulty of 
procuring them. Were a quantity for example of the article 
used for hemp in New Zealand, shown to a person in England, 
who had never before seen it, and was totally ignorant of its 
price, on being made accurately acquainted with its strength, 
durability, weight, absorbing qualities, and pliancy, as com- 
pared with real hemp, he would be able, knowing the value of 
the latter, to state pretty nearly what it actually sold for. 
But were a person, in the same country, perfectly ignorant of 
the value of pearls, and never having seen any, to be shown a 
string of them, and made acquainted with their qualities in 
relation to artificial pearls, and glass beads of various sorts, 
though knowing well the price of the latter, he would 
certainly be unable to assign the sum to be got for the former. 
Were a variety of alcoholic liquors to be presented to an 
individual quite ignorant of them, and of their value, and 
were he, changing from one to another, to partake, occasion- 
ally, freely of them all for months and years together, all other 
circumstances concerning them but their sensible qualities 



278 APPENDIX 

and effects being concealed from him, he would certainly 
be unable to fix their relative value. Were, in like manner, 
specimens of all the different fabrics used for female attire for 
the last ten years, with their relative durabilities ticketed on 
them, presented to a perspn of good taste, but perfectly 
ignorant of these matters, he would certainly also be quite 
incapable of coming near their actual relative cost [to pur- 
chasers in the market.] The same observation will apply to 
all other luxuries. As they compare with each other, not by 
their inherent qualities, but by the difficulty in procuring 
them, unless the comparative labor necessary to procure them 
be known, there is no means of fixing their relative price. It 
affords a rule, too, by which we may test what are, or are not, 
luxuries. Thus, I apprehend, that were a silver spoon, or 
sauce-pan, or vase, shown for the first time, to any person in 
the middle ranks of life, though ignorant of its value [selling 
price], yet seeing its beauty and susceptibility of receiving the 
most delicate impressions of the workman, and being informed 
of its durability, safety, and the saving of labor attending its 
use, on a fair estimate of these qualities, he would place 
it not very far below its present relative value to copper. 
He might, it seems to me, considering merely the qualities 
inherent in it, be willing to give for it twenty or thirty 
times what he would for the same article wrought in 
copper. He would, however, I should apprehend, be far from 
estimating similar articles fabricated of gold, at sixteen times 
the price of the same in silver. Supposing him possessed of 
real taste and accurate judgment, the difference between his 
estimate, and the actual comparative value [market valuation] 
of these metals, would mark how far they were, or were not, 
luxuries to people of his fortune. 

The only rule, then, which people desirous of possessing 
luxuries can adopt for measuring what they will give for 
them, is the degree of difficulty of procuring them, the amount 
of labor which must be given for them. When they are 
satisfied that any particular article of the sort they are in 
quest of is used by other people, and that it cannot be had for 
less, they will pay the price demanded. They do not seek for 
the grounds of their determination in the utility of the com- 



OF FOREIGN TRADE IN LUXURIES 279 

modity, but in its scarcity. Let a farmer go to lay out three 
pounds on lace for his wife, if he is assured that the dealer in 
that article to whom he applies will not charge him more than 
others, and that Mr. A's wife and Mr. B's wife wear the same 
sort, he will care little whether he gets for his money six or 
twelve yards, or whether it be two or three inches broad. All 
that he is concerned about is that he should get as much as 
other people. Let the same farmer think of purchasing some 
new manure for his land, he will conceive it necessary to 
ascertain both the effects of the article upon the soil he farms, 
in comparison with other manures, and its cost also com- 
pared with them. If he find that, compared with them, 
the cost is no greater, he will be inclined to purchase ; if he 
find it less, he will conceive it so much gain ; while it 
lasts it will be equivalent to a marie pit discovered on his 
own farm. 

If a dealer imports a commodity having a shade of distinc- 
tion scarcely perceptible considered in relation to the degree 
of enjoyment it gives, but sufficiently marked to distinguish it 
from other commodities of the sort, and if half a dozen people 
of rank adopt the use of the article as a sign of their superi- 
ority, it has all chances to enter into the consumption of every 
individual in the community who can afford it. In such 
biases, the price of the commodity depends [at first] altogether 
on the venders of it. But, as each of these wishes to sell 
as much as possible, and as he can do so most readily by 
underselling his neighbors, the price gradually falls under a 
free competition, until the dealers in it receive only the profits 
that the effective desire of accumulation, and the progress of 
improvement in the society measures out to them. At the 
end of the process the whole difference observable, if the 
article be completely a luxury, is a change of fashion. The 
principle of accumulation has not been led to grasp a greater 
compass of materials, nor has any addition been made to the 
general stock of the society : there has been merely the intro- 
duction of a new set of marks of distinction. The property in 
circulation is not augmented, but the coin has received a new 
impression, or got increased weight. It may, however, happen 
and very often does happen, that, during the process, a sort of 



280 APPENDIX 

factitious improvement is introduced, which, while it lasts, is 
sometimes nearly equivalent to a real improvement. 

Suppose a merchant, seeking to strike out a new branch of 
trade, exports to some distant country, and sells there to 
advantage, an article of luxury the produce of the community 
to which he belongs, and in return receives for it a com- 
modity, a simple utility in demand among his countrymen. 
Let the former commodity be lace, and the country to which 
it is exported E, and the latter commodity barilla, and country 
to which it is imported D. In process of time the trade 
increases, until a large quantity of lace is exported, and a 
large quantity of barilla imported. Suppose, farther, that the 
steady demand for the lace, joined to other circumstances, 
animates ingenuity to facilitate the process of manufacture, 
and that the article is before long produced at half the outlay 
it cost when first exported. In the ordinary course of matters, 
the diminished cost of production should be followed by a 
correspondent reduction in the price it is sold at in E. Two 
circumstances, however, may prevent this. The intercourse 
between D and E may be very difficult, and clogged by many 
obstructions, and the community E may be very numerous,, 
and may easily absorb a large amount of the article. Both 
circumstances would help to diminish the effects of competi- 
tion ; the former by lessening the number of competitors, the 
latter by preventing the actual competition induced from 
operating fully. It might in consequence happen, that lace, 
though produced with double facility, [still] sold in E at nearly 
the same price as at first. If we suppose that commodity 
to be a pure luxury, this would be no disadvantage to E, for the 
quantity actually used at that price would serve exactly the 
same purpose as double that quantity at a price reduced one 
half by reason of the diminished outlay of labor : while, on 
the other hand, it would be so far an advantage to D, that it 
would place somewhere there the command of all the labor 
which in E was actually paid for. Among the members of 
the society D, double the quantity of barilla that the labor 
[indirectly] expended in procuring it was [equitably] entitled 
to, would somehow or another be shared. The advantage 
would not certainly, of necessity, have that healthy and 



OF FOREIGN TRADE IN LUXURIES 281 

vivifying effect which real improvement occasions, for it 
might not spread through the whole community, but might 
be dissipated in luxuries by the merchants, manufacturers, 
and artisans engaged in acquiring it. If, however, in other 
branches of trade and of manufactures for exportation, similar 
facilities were [generally] introduced, and similar large returns 
obtained, and if in all the departments of domestic industry 
great real improvements take place, the advance of the whole 
society would be uniform, and not much unlike what would 
flow from a universally real improvement. 

Should two societies in the same way trade together in 
mere luxuries, a sort of factitious improvement [for them 
both] might be created by the effects of [an artificially] re- 
stricted competition. The merchants who engaged in the 
trade would, in the first place, acquire [the equivalent of] all 
the labor saved by the overcharge of the commodities they 
bought and sold, and these benefits might be in both societies 
more or less generally diffused. 

When, on the other hand, by the removal of [such] restric- 
tions, and the increased capacity of industry to fabricate the 
goods in request as luxuries, a free competition is induced, all 
these factitious advantages disappear. Each adventurer 
endeavoring to beat down his opponent in the foreign market, 
the productions of the industry of remote countries come to 
be offered there, for the lowest amount at which the strength 
of the principle of accumulation can permanently continue to 
produce them. They may even pass much below this ; for 
vanity, capricious in its tastes, soon begins to despise alto- 
gether what may be every one's purchase, and leaves what it 
once highly prized as now vulgar and unworthy of regard. 
In the supposed case of the exportation of lace, that com- 
modity might have triple the labor expended on it, and its 
quantity might be increased sixfold, and yet might bring in a 
smaller return than it did before. The ample revenues which 
the merchant, the manufacturer, the artisan, [previously] 
derived from the fabrication of such articles, become reduced 
to the lowest amount that may sufiice to move their respective 
productive faculties. Other branches of manufacture share 
the same fate ; the whole machinery of industry is clogged 



282 APPENDIX 

and encumbered by the heavy additional burden thrown on it, 
and distress and discouragement pervade the community. 

[To sum up this particular phase of our subject.] Restric- 
tions [of any sort, brought about by wars or otherwise,] 
operate quite oppositely on the exchange of [pure] luxuries 
between communities, from what they do on the exchange of 
utilities. Their first effects are beneficial, while their ulterior 
effects may be injurious. The interdiction of a pure luxury 
occasions no loss whatever to the whole society. It can 
scarcely fail to produce a gain. If it diminish the whole 
amount of luxuries consumed in the society, that is evidently 
so much saved. If, as is more likely, the force of vanity be 
not weakened, it must at least be directed to other objects, 
probably to some domestic imitation of the foreign article. 
In such cases the successful imitators will demand and obtain 
prices yielding much larger profits, than their capitals would 
give in any other employments. The saving of labor, either 
in checking vanity, or in supplying it with less outlay, is gain 
to some individuals, loss to none. Competition, however, will 
in time reduce the price paid for luxuries, to the lowest 
amount for which the laborer and capitalist will exert their 
energies. As improvement can have no effect on domestic 
luxuries, and as they must always be rated by the real labor 
bestowed on them, they are ultimately the productions of all 
others least profitable to the society. 

There are, however, very few, if any, commodities which 
are purely luxuries. Although vanity is in part the cause of 
the estimation in which very many are held, and though it 
gives to some perhaps nearly their whole value, nevertheless 
it seldom exists in any alone. It almost always applies itself, 
as I have already observed, to something ministering in some 
degree to real wants or pleasures. There is beneath almost 
every luxury a substratum of utility of greater or less depth. 

The effects, consequently resulting from the exchange be- 
tween different communities, of very many commodities, are 
compounded of the results produced by the traffic in articles 
of utility and of luxury. As it is impossible in almost any 



OF FOREIGN TRADE IN LUXURIES 283 

case to determine accurately how far any article is or is not a 
luxury, there is proportional difficulty in ascertaining what 
are the precise effects resulting from the exchanges actually 
carried on between any two communities. There is one prin- 
ciple which may, in some instances, help to guide us. Almost 
all articles of which the consumption is conspicuous, the 
precise effects resulting from their physical qualities difficult 
to ascertain, and which, from their novelty, have not yet been 
subjected to the effects of a free competition, may be presumed 
to be in a great degree luxuries. In them, we may be sure, 
vanity has found a material on which she could easily fix, 
and from which there has been no opportunity of dislodging 
her. 

The relative effects of restriction, and free competition, 
when opportunities have presented themselves of observing 
them, enable us, however, with some certainty to determine, 
how far the commodities subjected to their operation have 
been luxuries, or real utilities. In regard to articles supply- 
ing real wants, the more easy and unconstrained the com- 
munication, the more extended the production, the freer the 
competition, the farther, as we have seen, are the stocks of 
instruments of the societies exchanging carried towards the 
more quickly returning orders. Every step in advance in the 
course is equivalent, subject only to the risk of the communi- 
cation being interrupted, to a real improvement. With regard 
to such commodities, any general evil resulting from over- 
production is quite impossible. A partial glut, as it is termed, 
may indeed occur ; but this, although a slight partial evil, 
{although an evil to particular persons], must be a general 
good. The commodity produced satisfying real wants, an 
increased supply of it must diffuse a general and sensible 
plenty. In regard to such commodities the reasoning of Mr. 
Say is, I conceive, conclusive. A general overproduction is 
an absurdity, for it implies the means of a general consump- 
tion, and would, in fact, be a general improvement. It would 
be as if the materials which nature has given to man were to 
receive powers in addition to those which they already 
possess, for satisfying his wants ; as if the grain of the fields, 
the grass of the meadow, the trees of the forest, advanced 



284 APPENDIX 

more rapidly to perfection, as if the ore yielded up its metallic 
treasures with greater facility, the sun diffused a more genial 
^^armth, and the earth rejoiced in universal and exuberant 
fertility. The increased provision for wants thus presented, 
must either be consumed, or applied to the formation of in- 
struments to supply the demands of a more distant futurity. 

But though these are the effects of increased facilities in the 
exchange of commodities in as far as they are real utilities, it 
is exactly the reverse in so far as they are luxuries. Restric- 
tion in the exchange of luxuries may be, and often is felt, as 
no diminution of enjoyment, but a great saving of labor, and 
the removal of that restriction may almost immediately oblige 
all, or many of the communities exchanging, to expend the 
whole amount of labor they had before saved. If then we 
find that increased farcility of exchange, instead of diffusing 
plenty, spreads poverty, instead of carrying the stocks of the 
communities exhanging towards the more quickly returning 
orders, places them in those of slower return, we may assure 
ourselves that vanity must have been a very potent agent in 
giving to the commodities exchanged the estimation in which 
they were held. 

Perhaps the most remarkable example that was ever pre- 
sented, of general and long continued restrictions being at 
once and completely removed, is that which occurred in con- 
sequence of the general peace succeeding the final defeat of 
the Emperor Napoleon. A power which modern times cannot 
parallel, had been long exerted to bind up the commerce of 
Europe. It had been exerted in vain, for that commerce still 
moved, though it moved in shackles. The termination of the 
war undid them at once. The ships of the merchant again 
securely passed from land to land, and he again, without fear, 
exposed his wares in every market. Had the commodities 
thus largely exchanged, been altogether utilities, it is impos- 
sible but that a vast improvement must have been universally 
experienced, an augmentation of the resources of society every 
where felt. The havock and insecurity of war, and the waste 
of stock and labor attending it were done away with, and the 
whole energy and intelligence of the most powerful and intel- 
lectual race which possibly the world has as yet seen, were 



OF FOREIGN TRADE IN LUXURIES 285 

turned to the arts of peace, and the amelioration of the 
condition of man. Instead, however, of having to mark the 
progress of abundance, prosperity, and happiness, we are rather 
called on to note the prevalence of poverty and distress. It 
is, I apprehend, impossible, to explain the far extended oppres- 
sion under which capital and industry have labored, but by 
admitting that they have applied themselves largely to objects, 
the direct eiFects of the attainment of which are worse than 
useless to society. Misery it is true is clamorous, happiness is 
quiet, and therefore the amount of the actual distress may 
sometimes have been made to appear greater than the reality ; 
but admitting a large deduction for misrepresentation thence 
arising, there remain too many well authenticated facts and 
statements to doubt, that if freedom of intercourse and com- 
petition has produced good, it has also produced evil, and 
hence that luxuries have made a large part of the commodities 
in the production of which that competition has exerted its 
powers. We may observe, too, that countries producers of 
articles which cannot be accounted luxuries, have in fact 
derived great advantages from the facility of intercourse and 
increase of exchanges. Russia seems never to have made so 
rapid advances, as within the last twenty years, while in Great 
Britain protracted misery and distress were never so rife as 
they have been for the greater part of that period. Were 
European nations ranged according to [the character of] their 
productions, those two countries would probably be at opposite 
extremities of the scale of industry. 



AKTin.K III. 

OF THE OPERATIONS OF THE LEGISLATOR ON LrXURIES. 

The logisltitor is always called on to provide a considerable 
annual revenue. He has to pi'ovide for the expenses incident 
to the conduct of present wai-s. to the burdens imposed by 
those of preceding times, to the construction and maintenance 
of public works, to the encoura>^ement of science and art by 
premiums and otherwise, and to various other outlays. If 
any part, therefore, of this necessary aiuuial expenditure, can 
be dmwn from funds naturally dissipated in luxury, the art 
of the legislator will here etiect a saving to the comnumity to 
that amount. 

Commodities which are mere luxuries, derive their value, as 
we have seen, from the ditiicidty of obtaining them. The 
amount of labor [and other costs of pivxluction] necessary to 
procure them, and which thus may be said to be emboiiied in 
them, is what makes them esteemed. It is thivugh it that 
they become tit objects of vanity, marks of riches, things dis- 
tinguishing their possessors from other men. It is of no 
consequence how this labor has been expended. It may have 
been given to ransack the depths of the earth as for diamonds, 
or of the sea as for pearls. All that the possessor of the 
luxury desires, is, to have a means of showing that he has 
acquired the command of a certain amount of the exertions of 
other men. It is a matter of inditierence to him, what the 
ditiiculty is, to surmount which these exertions are necessary, 
'lluis, were we to suppose that diamonds could only be obtained 
from one particular and distant country, and pearls from 



OF LUXURIES AS OBJECTS OF TAXATION 287 

another, and were the produce of the mines in the former, and 
of the fishery in the latter, from the operation of natural causes 
to become doubly difficult to procure, the effect would merely 
be that in time half the quantity of diamonds and pearls that 
it had before been necessary to employ for that purpose, would 
be sufficient to mark a certain opulence and rank. The same 
quantity of gold, or some other commodity reducible at last to 
labor, would be required to procure the now reduced amount, 
as the former larger amount. Were the difficulty interposed 
by the regulations of the legislators of the distant countries, 
it could make no difference to the fitness of these articles to 
serve the purposes of vanity. As in the case of a natural 
difficulty, an additional quantity of labor would be requisite 
to procure [on the market] the commodities in question, and 
they would, therefore, equally serve the purposes of vanity. 
Nor would it seem to alter the case, were the difficulty 
interposed by the legislator of the society consuming [but not 
producing] the articles. 

For the sake of illustration, we may suppose that some par- 
ticular society is possessed of a pearl fishery, from which its 
members are supplied with the pearls they use, and farther, 
that the case may assume the simplest form, that this society 
has no communication with any other. The fishery is situ- 
ated in a particular bay, where alone, it is found, the animals 
yielding these concretions can live. The labor annually ex- 
pended in procuring this luxury, amounts to a million days, or 
reckoning each day at two shillings, to one hundred thousand 
pounds. Each day's labor procures one hundred oysters ; from 
which, on an average, one pearl is procured. In this state of 
things a discovery is made, similar to that which Linnaeus 
conceived probable. It is found, that, by a particular process, 
the diseased action in this creature, which, like ossification in 
the human body, produces a deposition of calcareous matter 
in its fleshy substance, instead of on the sustaining earthy 
portion of its frame, may be induced ad libitum. The effect 
of this discovery is to diminish very greatly the labor neces- 
sary to procure these substances. In process of time, every 
hundred oysters, instead of one, yield, on an average, five 
hundred pearls, consequently the amount of labor expended 



288 APPENDIX 

in procuring; each might be little more than the ti\ e hundredth 
part of what it was. 

The nltimate etiect of sueli a ehanoe would depend on 
whether the hshery were free or not. Were it free to all, as 
pearls could be got simply for the labor of lishing for them, a 
string of them might be had for a few pence. The very poorest 
class of women in the society could, therefore, atlbrd to de- 
corate their persons with them. They would thus soon become 
extremely vulgar, and unfashionable, and so at last valueless. 

If, however, we suppose that instead of the tishery being 
free, the legislator owns and has complete connnand of the 
place, where alone pearls are to be procured, as the progress 
of discovery advanced, he might impose a duty on them equal 
to the diminution of labor necessary to procure them. They 
would then be as much esteemed as they were before. What 
simple beauty they have would remain unchanged. The dith- 
culty to be surmounted in order to obtain them, would be 
different, but equally great [would be less for the producer, 
but equally great for the consumer], and they would, there- 
fore, equally serve to mark the opulence of those who pos- 
sessed them. If we suppose the yearly expense of obtaining 
the pearls, and of collectii\g the duty on them, to amount to 
twenty thousand pounds, there would then remain to the 
legislator, a clear annual revenue from this source of eighty 
thousand pounds. This revenue would not cost the society 
any thing. If not abused in its application, it would be a clear 
addition of so much to the resources of the community. 

Were the precious metals in reality, as Adam Smith seems 
to have conceived, mere luxuries, a tax imposed on them at 
the mines would have a similar etiect to the hypothetical tax 
on pearls, which we have been considering. It would make 
a real addition of so nnich to the revenue of the conununity 
possessing the mines. In this case the tax imposed by the 
king of Spain on the gold and silver obtained from America 
amounting at tirst to half of the whole quantity annually pro- 
cured, would not, unless among the first adventurers, have 
caused any diminution of the revenue of individuals, and its 
produce would have formed a large real addition to the general 
revenue of the society. 



OF LUXURIES AS OBJECTS OF TAXATION 289 

Neither in this case, however, nor perhaps in any other, 
have commodities altogether kixuries presented themselves to 
the operations of the legislator. They all, jjrobably, derive 
part of their value from their utility, although in many 
instances the part it makes up may be very small. Hence 
a general tax upon almost any class of commodities, is a tax 
in whole, or in part, upon some utility, and abstracts some- 
thing from the revenue of its consumers. All silk goods are 
perhaps in part luxuries to the majority of those who con- 
sume them. They are also, however, in a very great degree, 
and to all classes, utilities. There is a real beauty and dura- 
bility in such fabrics, probably in many cases sufficient to 
warrant the higher price paid for them. A general tax, there- 
fore, upon silks, though it would in part be a tax on luxuries, 
and, in so far, occasion no diminution of the [real] revenues 
of any one, would also in part be a tax upon utilities, 
abstracting a real amount from the funds [pleasures] of 
individuals. The same things will hold true concerning a 
great number of commodities. Pure vanity, and real enjoy- 
ment, have each a place, as we have seen, in the general 
expenditure of almost every person. 

But though this is true of taxes levied generally on any 
class of commodities, it yet not unfrequently happens, that 
taxes on commodities of the same class may be so ordered as 
to fall nearly, or altogether, on luxuries. It may be, though 
a whole class of commodities have, under the appearance 
of luxury they exhibit, a considerable substratum of real 
utility, that yet individuals of the class, not differing from 
others in the quantum of utility they possess, may have some 
peculiarities serving to afford a hold to vanity, and to enable 
that passion to raise their value very high, by making them 
pass as marks of the superiority of one man over another. 
As these, therefore, differ from other commodities of the sort, 
merely in the amount of luxury embodied in them, a tax on 
them may be considered as altogether a tax on luxuries, 
giving a revenue to the legislator, and taking nothing from 
the society.^ 

^ [The managers of the passenger traffic on European railways, and the 
managers of city theatres everywhere, make use of the principle here set 

T 



290 APPENDIX 

Alcoholic liquors, considered as a class, are probably, in a 
great degree, luxuries. They may in part be really useful, 
but certainly, speaking in the general, their consumption is 
not measured by the utility resulting from it. Some of ';hem, 
however, agreeing with each other in the amount of utility 
they may possess, differ yet largely in the quantum of luxury 
embodied in them. Thus it is, I apprehend, very difficult to 
say whether rum, brandy, whisky, or gin, considering each 
with regard to its intrinsic qualities, is the preferable liquor. 
It seems probable that they are nearly alike in most respects, 
save their being more or less luxuries. In Great Britain rum 
is, I believe, at least double the price of whisky, and brandy 
still higher, the consumption, therefore, of the dearer article 
instead of the cheaper, must arise nearly altogether from 
vanity. In Canada, again, the price at which Scotch whisky 
is sold, is double the price of rum, and considerably above the 
price of brandy. The excess of its price above these other 
liquors must, therefore, be considered a luxury.^ The chief 
part of the high price in England of rum and brandy, is made 
up of the duty paid to the government. In this case, there- 
fore, the legislator would seem to derive a revenue from mere 
luxuries. Were such duties withdrawn, and were not the 
measure to lead to an increased and extravagant consumption 
of alcoholic liquors in general, it would have the effect of 
changing the sort of liquors consumed. Rum and brandy 
being as cheap as whisky, would come, with many people, to 
occupy the place of it, they would no longer afford a peculiar 
gratification to vanity, and that passion would fly off to some 
other article, fitted for its purpose, in all probability, not hy 
the operations of the legislator, but by the real expenditure 
of labor or some equivalent to it. The society, considered as 

forth. The "substratum of real utility," iu the one case, is to see the 
play, and in the other, to be transported from one place to another. The 
managers artfully combine with these "utilities," through a system of classi- 
fication, a means of attainment of social distinction.] 

^The quantity consumed is small. It would in all likelihood be much 
greater, were it not for the difficulty of distinguishing it from whisky of 
the country, which sells at less than one fourth of the price. Scotch whisky 
brings 10s. per gallon; Canadian, from 2s. to 3s. 



OF LUXURIES AS OBJECTS OF TAXATION 291 

a body, would lose the advantages of the revenue before at 
the command of the legislator, and, considered as individuals, 
they would gain nothing. Certain classes among them would 
merely change the form of some of the characters, by which 
they marked to others their relative means and stations. 

It would appear, then, that the powers of the legislator, 
when prudently directed in the taxation of luxuries, may 
be so exercised as to raise a considerable revenue, without 
trenching at all on the incomes of individuals. It is to be 
observed, that his proceedings in this way have a greater 
chance of success, when he levies duties on foreign, than on 
domestic commodities. Almost all commodities of home 
manufacture form large classes, running gradually into one 
another, and so not easily discriminated, or affording any 
very striking characteristics to serve the purposes of vanity. 
If we examine, for instance, the manufactures in Britain of 
cloths, or of malt liquors, we shall find in them all a great 
number of commodities differing very little from each other. 
If a heavy duty be then imposed on any of them, there is a 
considerable chance of its consumption greatly diminishing or 
ceasing altogether. Were porter taxed more highly than other 
malt liquors, there are so many sorts of ales which very nearly 
resemble it, or might be made to do so, that instead of being 
converted by the tax into an especial luxury, it is probable 
the consumption of porter would nearly cease. The imposition 
of a high duty on any particular sort of foreign wine, has not 
so great a tendency to diminish its consumption ; people would 
still drink claret, however highly it were taxed, because it has 
qualities sufficiently marked to distinguish it from other wines, 
and to make, therefore, its consumption capable of denoting 
a degree of present opulence, proportioned to the price it costs. 

Some commodities of domestic manufacture are, neverthe- 
less, much better fitted for the operations of the legislator 
than others. A duty, for instance, on the finer textures of 
cottons and linens, might perhaps be so levied as to make it 
nearly altogether a tax on luxuries. The fineness of the 
thread in these fabrics, affords a pretty conspicuous mark, 
and by raising the impost gradually in proportion to it, the 
more delicate sorts might, perhaps, come to be esteemed as 



292 APPENDIX 

adequate marks of a capacity to expend largely and so be 
converted into especial luxuries. In this case part of the 
expenditure of individuals, which is now dissipated in chang- 
ing fashions, would be made over to the legislator, and might 
suffice to sustain some part of the public burdens. 

All such duties, however, require to be laid on very gradu- 
ally, else the consumption of the commodities on which they 
are imposed may very probably be stopped. Men have 
generally a very high opinion of the reasonableness of their 
conduct, and the correctness of their taste. They are apt to 
fancy that there is a real and very great enjoyment in ex- 
penses, which, in truth, have scarce anything to recommend 
them but the gratification they afford to vanity. In like 
manner, when any article rises suddenly and greatly in price, 
when in their power, they are prone to adopt some substitute 
and relinquish the use of it. In such cases the observation is 
forced on them, that the commodity is no better than it was 
before, and that, if then they sometimes used another for it, 
the best thing for them now to do is to confine themselves 
altogether to that other. Hence, were a high duty at once 
imposed on any particular wine, or any particular sort of 
cotton fabric, it might have the effect of diminishing the 
consumption very greatly, or stopping it entirely. Whereas, 
were the tax at first very slight, and then slowly augmented, 
the reasoning powers not being startled, vanity, instead of 
flying off to some other objects, would be apt to apply itself 
to them as aftbrding a convenient means of gratification. 

The chief practical objection to such imposts, as a source of 
revenue, is the expense of collection and the attempts gener- 
ally made to evade them. The former diminishes the amount 
yielded by them, the latter is injurious to the morals of the 
people. Both are greater in conmiodities of domestic, than of 
foreign manufacture. In articles produced within the country, 
it is necessary to watch the whole progress of manufacture, 
and to guard against imposition at every stage. Commodities, 
on the other hand, imported from abroad, have only to be 
watched at the time and place of importation. 

There is a case in which duties imposed on foreign com- 
modities, have particular advantages. It not unfrequently 



OF LUXURIES AS OBJECTS OF TAXATION 293 

happens that in manufactures which it is the object of the 
legislator to introduce, and carry to perfection within the 
society, the chief, perhaps the only difference, between the 
enjoyment afforded by the foreign and by the domestic article 
lies in the gratification the former affords to vanity. This is 
very generally the case in all commodities affording materials 
for such articles of dress as are seen by many, these being 
always in a great degree luxuries. I very much question, for 
instance, whether the passage of the manufacture of calicoes 
from Britain to America, has occasioned the wearers of calicoes 
in the United States any sensible diminution in the comfort, 
or in the pleasure arising from the perception of beauty, 
afforded by such articles. The standard is in such cases 
altogether relative, the pleasure given by any particular dress 
of this sort arising from its being as fashionable, and as be- 
coming as the dresses of other persons, or more fashionable 
and more becoming than theirs, and the chief requisite for 
rendering any fabric fashionable, seeming to be that it be 
costly, and have novelty. The unrestrained introduction of 
British or other foreign calicoes would, therefore, in all pro- 
bability, have been felt, merely as a change in fashion, not as 
an increase of pleasure or diminution of cost. 

There are very many similar cases. As the great mass of 
commodities are in part utilities, in part luxuries, so, in trans- 
fering the manufacture of any of them from one country to 
another, it very frequently happens that, in as far as the 
article in question has real utility, the domestic soon equals 
the foreign variety. It is chiefly in a laborious finish, for the 
most part the result of the demands of vanity, that the former 
falls behind the latter. In such instances the operation of 
transferring the art from one country to another, by means 
of a protective duty, takes either very little, or nothing, from 
the revenue of individuals, and makes, it may be, a consider- 
able addition to that of the legislator. Its general effects on 
the funds of the community, are [accordingly] directly and 
indirectly, to advance the absolute capital of the society by 
the introduction of a new art, and, during the process, to give 
a considerable revenue to the legislator for the attainment of 
public objects, without encroaching at all, or but in a very 



•294 APPENDIX 

slight degree, on the returns made by the industry or stocks 
of individuals. 

[The leading objection to the foregoing, founded on the 
principles of Adam Smith,] proceeds on the assumption, that 
what is true concerning the wealth of individuals, and suffi- 
ciently explains its increase and diminution, is also true 
concerning the wealth of societies, and fully explains the 
causes of its increase and diminution. 

If, other circumstances remaining unaltered, a single in- 
dividual in a society acquires the power of purchasing some 
article entering into his system of consumption, at less cost 
than before, he is by so much a gainer, and the change is 
equivalent to a proportional increase in [his] revenue.^ Trans- 
ferring this fact to societies, it is held that the revenue of 
every society is increased in exact proportion to the diminu- 
tion in the cost of an}^ article entering into its sj'^stem of 
consumption, and diminished in proportion to the increase in 
the cost of any such article. By how much, therefore, any 
operations of the legislator add to tlie price of any commodity, 
by so much, it is said, they always, and in every case, take 
from the revenue of the society. When, therefore, by taxing 
foreign luxuries, the legislator raises their price, it is asserteil 
that he proportionally diminishes the general revenue ; [and 
thereby the general stock or capital, since capital can only 
augment by accumulation from revenue]. 

The answer to this objection is, that though as every 
commodity consumed by an individual, derives the estimation 
in wdiich it is held from something in some most complicated 
system of persons and things constituting the society of which 
he is a member, wdiile that system remains in all its parts un- 
changed, whatever gives him the command of a greater portion 
of the particular commodity than before, necessarily increases 
the amount of commodities, which, compared with others, he 
possesses, and thus makes him, as compared with them, so 
much richer; yet, if any commodity become universally 
cheaper throughout a whole society, as this implies a change 
to a certain extent in the system of things, comprehended 

'[See the tirst paragraph of Number 9 of the Residua.] 



OF LUXURIES AS OBJECTS OF TAXATION 295 

with persons in the term society, it may be that the revolution 
may affect the causes giving estimation to the commodity in 
question, and that, until we know whether or not this be the 
case, and how it operates, we act with unwarrantable rashness 
in transferring rules true concerning individuals, to societies, 
and in asserting that a general diminution in cost, is, in all 
cases, equivalent to a general increase of revenue, or a general 
augmentation of cost, to a general diminution of revenue. 
That if there be any class of commodities, the estimation of 
which depends wholly, or in part, on their power to mark the 
possession of a certain relative superiority, or a command 
greater or less of the labor of other men, then the generally 
diminished cost of such commodities, lessening their power to 
mark the desired distinction, and taking thus in a like degree 
from that for which they were altogether, or in part, esteemed, 
either makes no change in the general revenue, or a smaller 
change than that indicated by the amount of the diminution. 
That as regards commodities serving merely, as Mr. Storch ex- 
presses it, for marks of opulence, their fitness for the purpose 
is diminished as their cost becomes less, and, therefore, a 
diminution of their cost produces no increase, or no pro- 
portionate increase, of general revenue, and an increase of it, 
no diminution, or no proportionate diminution of general 
revenue.^ That thus, though, were the power of procuring a 
string of pearls for a few hours labor given to any individual 
European, it might very greatly increase his wealth, yet, the 
same power given to all Europeans, would produce no increase, 

^ It is remarkable that neither Adam Smith, nor Mr. Say, nor Mr. Storch, 
although they have stated distinctly enough in various places, that many 
commodities derive their whole, or the greater part of their value, from the 
gratification they afford to vanity, — their power to mark the superiority of 
one man over another, — seem to have perceived that the admission was fatal 
to the majority of their theoretical conclusions. They consequently have not 
thought it necessary to adduce any reasons to show that the operations of the 
legislator, on such commodities, may not have the beneficial effects indicated 
in the text. Mr. Say, indeed, has the following passage. 

" De ce que le prix est la mesure de la valeur des choses, et de ce que leur 
valeur est la mesure de leur utilite, il ne faudrait pas tirer la consequence 
absurde qu'en faisant monter leur prix par la violence, on accroit leur utilite. 
La valeur echangeable ou appreciative n'est une indication de 1' utilite donnee 
de la production r^elle, qu'autant que cette valeur est abandonnee a elle meme 



296 APPENDIX 

or no proportional increase to European wealtli, and, on the 
contrary, as the facility of purcliase by putting the wearing of 
pearls out of fashion, would probably render the stock of 
these articles in the possession of individuals, valueless, it 
would, in all probability, proportionably diminish the amount 
of wealth actually existino-.^ 



et que raotion des homines qui font un inaiche est entierement libre ; de 
meme qu'une barometre n'indique l;v pesanteur de ratmospherc, qu'autant que 
le mercure peut s'y inouvoir avec facilite. " p. 5. vol. I. 

So far as the above is applicable to luxuries, it is evidently nothing but an 
ipse dixit dressed in a metaphor, — a sort of argument too ecoiioynical to admit 
of an answer. If luxury, "Luxe de I'ostentation," be, as Mr. Say himself 
says, " une consommation qui n'a pour objet que cette depense m6nie ; une 
destruction de valeur qui ne se propose d'autre but que cette destruction '' 
(vol. U. p. 225), it surclj' matters not to the consumer how this value be given, 
to the commodity. 

^[See " Note M " in the Appendix.] 

[We get in the above statement of principles an important suggestion as to 
the erroneous tactics hitherto pursued by most advocates of unimpeded foreign 
trade. The mistake has been made of taking up the defence of the consumer — 
of commiserating him for the burdens he has to bear because of tarififs. We 
now see that such is the nature of expenditure for consumption (a large part 
of it) that he is going to be burdened in any event. If the government does 
not tax him he will tax himself. 

The line of battle should be drawn not in the realm of exchange but in that 
of production. The question should be asked, how does the protective policy 
as actually carried into practice affect the forces of production — the prime 
movers of industrj'. Does it promote or hinder them ?] 



ARTICLE IV. 

OF THE ART OF THE BANKER. 

PART I.— OF BANKING IN GENERAL. 

PART IL— OF PARTICULAR SYSTEMS OF BANKING. 

PART 1} 

The busines.s of banking, seems to owe its foundation and 
extension, to its capacity for giving room for the developement 
of the benefits, and for restraining and remedying the evils of 
the system of credit. The operations which the banker 
executes in a great society, have more than the advantages of 
those performed by the system of virements in France, or 
Russia, and by the petty store-keeper in a remote American 
settlement, and avoid many of the inconveniences of both. 
He is the instrument, through which the mass of the ex- 
changes, taking place in the community, is performed. It 
is his business to furnish the means of transacting all ex- 
changes that the condition of the society requires, and it is 
the business of all individuals having many such exchanges 
to effect, to make application to him for the means of transact- 
ing them. 

In a great society, a person extensively engaged in business, 
may, in a shoi-t time, have transactions with twenty, thirty, or 
a hundred individuals ; his circumstances can be known but 
to a few of them, nor is it possible for him to produce to each 
satisfactory evidence of his own capacity to discharge his 

^[This is the omission from Chapter VIII., where Rae began his discussion 
of the subject of credit.] 



298 APPENDIX 

engagements, or to give him the security of others for their 
performance, and even could he do this, it would be insuffi- 
cient for the purposes of the greater part of them. If such a 
person, however, really possessed funds in trade and manufac- 
ture, if he really owned a stock of instruments requiring a 
constant change and transfer with those in the hands of 
others, he might find means to satisfy one individual, the 
banker, of his capacity to execute these exchanges in reason- 
able time, or procure others to be responsible for his doing it. 
It is then the business of the banker to give him the means of 
doing so, and he accordingly lends him money when he 
requires to add to his stock of instruments, that is to buy, and 
receives money from him again, when he transfers instruments 
to others, that is, when he effects sales. Every person engaged 
in business doing the same, the banker is the general lender, 
and receiver of the society. 

The mechanism of banking is managed in two ways. The 
one is by discounting bills, that is, by giving money immedi- 
a,tely, for the obligations by which one man contracts to pay 
money to another, at some future time, deducting a part, the 
proportion of which is determined by the order in which 
instruments stand in the society, and by the length of the 
period. This method is analogous to that of virements, but 
far preferable. Thus, an individual who holds an obligation 
by which another binds himself to pay him the sum of two 
thousand pounds in six months, were he in some parts of 
Russia, would be justifiable, were he confident of the solvency 
of his debtor, to contract obligations to that amount, and pay- 
iible at the same time. Were he then desirous of having 
something transferred to hin^, of the value of two thousand 
pounds, his granting an obligation to that amount, and payable 
at six months, might help to make the two transactions of 
easy arrangement. But, supposing that he were desirous of 
having a number of small transfers made to him, that he were 
to grant a proportional number of obligations, that the per- 
sons to whom he granted them were again to grant others, 
still smaller and more numerous, and that these were again to 
be subdivided and reunited, it is evident that the mass of 
affairs, would become so complicated, and the number of in- 



OF BANKING 299 

dividuals concerned in them so large, that the trouble of 
arranging them would be excessive. This system is of con- 
sequence, as has been already observed, of limited application. 
But when an individual gets a bill discounted, the transfers he 
effects with the bank bills he receives, occasion no future 
trouble to himself or others. 

The system of bank credits is the second mode, in which the 
business of banking is managed. It is somewhat analogous to 
that carried on, through the aid of the books of the North 
American store-keeper. The banker gives the means of effect- 
ing any purchases which those dealing with him are desirous 
of making, and, when they sell, gives them immediate credit 
for the amount they receive. He is not, however, like the 
store-keeper, urged on, by the dread of a stock of goods lying 
on his hands too long, to allow people to run accounts with 
him, whose credit is in any means doubtful. He is a dealer 
simply in credit, and it is his business, before giving credit, to 
demand such security as may satisfy him that he can sustain 
no loss, and this being granted, to afford the requisite accom- 
modation on reasonable terms. 

The advantages which the banker derives from being the 
general lender of the community, arises chiefly, from the 
peculiar sort of money he lends. It is not specie, but merely 
an obligation to pay in specie. But as all who engage in 
business have to return cash to him, it is equally good to them 
as specie, and through them is equally well received among 
the other members of the community. Thus the money of the 
banker comes to make a great part, or nearly the whole, of 
the circulating medium. 

The benefits which the society receives from the system, 
when there are no defects in the conduct of it, seems to be 
threefold. 

1st. As far as it extends, the expense of the circulating 
medium, the expense which men in business must otherwise 
be put to by being obliged to have a quantity of cash always 
lying by them to meet sudden emergencies, is done away 
with. When a man wants cash, he goes to the bank for it ; 
when he has cash, he carries it to the bank. Money never lies 
idle. 



300 APPENDIX 

2d. It does away with all deficiency in the circulating 
medium [in respect to the individual].^ When the system of 
instruments which belong to an individual, is defective in any 
part, he can at once supply the defect, and when it is redun- 
dant, he has no difficulty in disposing of the superfluity where 
it may be usefully employed. 

3d. It does both, without the evils otherwise attendant on 
the substitution of credit for coin. The dealings of men of 
prudence and character, are not so mixed up with those of 
improvident and suspicious persons, as to make the one bear 
the burden of the losses sustained through the folly or dis- 
honesty of the other. Every instrument, as its formation is 
pushed on by the industry of the members of the society, is 
moved directly to its proper station. It neither runs the risk 
of being subjected to remain useless, owing to the expense of 
moving it, nor of being misplaced or destroyed in the process 
of moving it.^ 

The tendency of these three effects, flowing from the bank- 
ing system properly conducted, is to carry the instruments 
subject to the operation of exchange, to orders of more quick 
return, than they would otherwise have occupied. The outlay 
expended on them is not so great, and they sooner make the 
expected returns. The accumulative principle receives in con- 
sequence, a stimulus, that enables it to embrace a larger 
compass of instruments, and the general stock of the society 
is soon proportionally increased. Greater facility is also given 
to the division of emplojanents, from there being no ex- 
traneous obstruction to the additional exchanges required, 
and hence new branches of business arise. From both these 
circumstances, the number and amount of exchanges increase. 

The money of the banker, compared with gold and silver, as 
a medium of exchange, would thus seem to be not only less 
expensive, but more efficient. When the circulating medium in 

^ [That is, the solvent individual never finds himself without the means of 
making a purchase which comes within his general financial ability. See 
passim. ] 

2 [The statements in this last paragraph are obviously an exaggeration. But 
the burden of business risk is certainly greatly mitigated under a regime of 
banking.] 



OF BANKING 301 

any country is specie, probably far the larger portion of it lies 
idle. Every merchant, in such a country, has a quantity of 
gold or silver, proportioned in amount to the business he 
carries on, doing actually nothing, but only waiting to do 
whatever may offer. The strong boxes of all the merchants 
in the country, always hold, therefore, a large portion of its 
capital in inactivity. In a country, on the other hand, where 
the bills of the banker form the circulating medium, the quan- 
tity of money lying for any time idle [outside the reserve of 
the bankers themselves] is insignificant. No money is re- 
tained, but for a specific purpose. In Scotland, for example, 
every merchant places in the hands of the banker, all the cash 
for which he has not immediate use. 

Were we, therefore, to confine the advantages derived from 
the institution of banks, in any community, to the substitu- 
tion of a cheap medium, for a dear one, we should make an 
imperfect estimate of them.^ If, for instance, the circulating 
medium in any country be one million in coin, and if that be 
superseded by paper, should the quantity of paper in circula- 
tion be found to amount also to one million, it would indicate 
a great increase in the transfers effected, and would show, 
either that a larger compass of materials had been brought 
within reach of the accumulative principle, or that employ- 
ments had been more subdivided, or that both these circum- 
stances had occurred. 

From the same causes, the effects of a recurrence to a 
metallic currency, and the compulsory substitution of one 
million of specie, for one of paper, would be far from being 
limited to the expense of the bullion employed in the opera- 
tion. It would, besides this, render impracticable a multitude 
of transfers, that might otherwise have taken place, dis- 
organize the whole system of exchange, place the stock of 
the society in orders of slower return, and put a mass of 
materials, which the accumulative principle had before been 
able to grasp, beyond its reach. 

The extent to which the banking system may, in any 
country be carried, seems to depend on four circumstances. 

1st. The amount of the science, skill, and population exist- 

i[This is a covert criticism of Adam Smith. See Part II. of this article.] 



302 APPENDIX 

ing in the country, to work up the materials it affords, and 
the abundance of these materials. 

2d. The strength of the accumulative principle, the oppor- 
tunity it has had to operate, and consequent division of 
employments, approach of instruments to the more slowly 
returning orders, and accumulation of stock. These two 
circumstances determine the amount of the possible exchanges, 
and, consequently, [at any given level of prices] of the [amount 
of] money [of all kinds] that may be employed in effecting 
them. 

3d. The general intelligence, sagacity, and integrity of the 
members of the community. A person greatly deficient in 
any of these respects, is one with whom a banker would not 
wish to deal. But, these qualities are of those giving strength 
to the effectiv^e desire of accumulation ; this circumstance, 
therefore, may be considered as merging in the last, the 
general strength of the accumulative principle. 

4th. The efficiency and security of the system of banking 
adopted. 

On the other hand, the benefits to be derived from banking, 
in proportion to its extent, would seem to be greater, the 
nearer instruments are to the more quickly returning orders, 
and the greater consequently the scarcity of specie. Where, 
therefore, the accumulative principle being strong, and from 
the implied intelligence, and honesty of the community, the 
system of banking extensively practicable, but from want of 
time to work up materials to more slowly returning orders, 
instruments are at those of quicker return, there the opera- 
tions of the banker are peculiarly beneficial. 

We have, perhaps, sufficiently enlarged already, on the three 
first of the circumstances referred to. It only remains, to 
show the chief points of connexion of the last of them, with 
the principles it has been attempted to explain. To do so, it 
is necessary to refer to the occasional evils resulting from the 
system of banking, diminishing its general utility. They may 
be reduced to two. 

1st. The money which bankers circulate, must be the repre- 
sentative of real property. It must be exchangeable for some 
commodity, or commodities, equal to the amount at which it 



OF BANKING 30S 

is rated. If it may be always exchanged for specie, or for 
some proportion of the general revenue abstracted for the 
purposes of government, it will be a representative of some- 
thing real. But it sometimes happens that bankers squander, 
or waste, the funds provided for payment of the demands to 
which they are liable, and this being discovered, their money 
becomes valueless, and those holding it as an equivalent to 
capital, sustain loss to the amount they hold.^ The loss thus 
sustained, both in itself, and in the general diminution of 
confidence in banking transactions and retardation of ex- 
changes consequent on it, makes it a matter of great import- 
ance to every mercantile community, to have banks of 
indubitable solvency established throughout it. (It were 
beyond the present purpose, to inquire into the particular 
system and regulations that may best produce such a result.. 
There are, however, two general observations, arising from 
the nature of things, which naturally present themselves. 

When capital is largely accumulated, and at orders of slow 
return, there will be very many, who will be disposed to allow 
their funds to remain in that employment, and be content 
with the moderate revenue thus produced to them. When„ 
on the other hand, they are at orders of quicker return, there 
is a great temptation to divert the fund, set apart for these 
purposes, to speculations promising great gain, but sometimes 
producing great loss. Banking will consequently be in general 
safest, where capital is most largely accumulated. 

Again, as no possible precaution can prevent a company of 
bankers from acting dishonestly, who are willing to combine 
for such a purpose, for they can only be required to produce 
statements drawn up by themselves, where there exists a 
great deficiency of real principle, and a proneness to defraud, 
banking becomes dangerous or impracticable.) 

2d. The second evil arising from the practice of banking,, 
has its origin, in the system of credit itself; and the shock 

^[That is, those holding a claim on the bankers as an equivalent to real 
funds. "Capital" of course with Rae means instruments other than the 
peculiar instrument of exchange, money. The proper term for an accumulated 
stock of money is funds. Sometimes in this Article Rae uses this term, but 
more often falls carelessly into employing the term capital.] 



•MH APrK.NDlX 

which, as it is t'lMiudoil oxi p^^.'\;uhn^■ opinion, it is liablo to 
receive iVoni whati^wr shnUi's piihlie eontiilenee. 

Every pi>rson en^ai;ecl in the lorniation anil transl'm- t>f 
eomnioilities, and ailoptin*;- the system ot" creilit as the nieilinn\ 
' of transfer, is iiulebteJ to sonu* inilivitluals. as. in tnrn, other 
intlix iihials are indebted to Iiini. The stock also of instrn- 
ments he has on hand, allows hini io o\\'cr a certain amonnt of 
connnodities fen* sale, and ri'niiircs him, if he continue his 
business on the same footin*;-. to purchase ci>rtain other com- 
modities, and pay for certain amounts oi lalun*. What is 
(.>\vine' hin\, and payable witliin a >;i\en time, may exceed 
what hi> owes i)tht>rs. payabK' within the same time, ()r may 
equal it. m- comt> short of it. What he is able to sell others 
within a i;iven time, may also exceed what he reipiires to buy 
within the same time, or may be equal to, or less than it. It 
will always be the case. tiH>. that individuals will look forward 
l\>i- the nii-ans o( disehar^iui^- tlu' debts they have contracteil, 
not cmly to the debts owini:; them by others, but to the sales 
tlu\v expect to etlect. Wt>re this to happen imly to persons of 
really abuiuiant capital, there would be no reason to fear the 
uini-performance of engagements contracted. But it also 
happens to those, whose capitals have been reduced by mis- 
fortune or in\jnndence, and therefore, there ;ire always many 
in every mercantile connnunity, whose ability to discharge 
their obligations is more or less doubtful. When, therefore, 
any cau.sc opi^'atini^' extensix fly, jiml prejuilicially, on mercan- 
tile transactions occurs, it ijenerally happens, that there ari.se 
ca^es of incapacity to meet e»iiiai;ements, and, as one man 
depends for tlu' means oi tlischainiui;- his debts, on tlu> debts 
others owe him, that end»arrassment and distress spreail 
throughout the wlmle nu^cantile body. The experience of 
the misfortunes atteiulino- this state of thing's, leads every one 
enoaoed in business, when he thinks there is reason to fear 
its approach, to endeavor ti> withdraw himself from tlu- 
danj^er, by avoiding- to contract obligations to pay. There is 
conseipiently a general diminution of purchases, and a general 
temporary fall in prices.' 

' Mai'kot prioo, whii'li is tUu'tiitilius^, is horo spv>kon of. W'lmt is toniioii 
the iiatiir.'tl (irico ot things, ov thi-ir goiu-i\il iivt-vago prii'e, is tluit iiKuio troatoil 



OI" IIANKINC; 



305 



liill. wliild |»i'ii(|i'lil, |»i'.i»|»lc ;i,ic, UiMM nJilc l,<) (Kiciirc MmmiiHcI v<'.H 
I'r-oiri evil, Uicy itic.rcfiHc- IJic- <li(Iic,ul(, ic.it ol" Ui()H<!, who lia-vc 
(',t)ulvn,('i<'.i\ ()|)li<^ii,(,i()tiH I/O \>n,y, in (Icitc-ndcjicc, on Uio pfoc,c,(!(lH 
of Mii.lcn l,o l)c, cdccXcd ; ji,M(| Monic, of UxiMc Ix-coiriiiiM' inc,;i,|»n,l)l(; 
()!' ol)l,iiJnin^' Ui(! fn(',ji,nH oi' triccUn^' Uicir (!n^n,^(;rn(',nl/H, ilic-ir 
fuJliicc, inc,n;)iHc,H i\\(; ^'cncniJ (JiHl-rcHH, imd fiirUicr IcHHc-tiH Ukj 
tiutriltc.r- inclined l,o |Huc.fiji,Hc,. 

At (JiiH f'.onJMncLnrc, l/lic Jid'nJrH of (,[ic, l>(i,fd<(!r [iinlcvi^o u. rcvo- 
lii(,ion. Vov, n,H l-lic rHind)c,r <»!' hnycfn (liinininlicM, Uic.fc \h Ichh 
money (•(■(jniMil/e for (/r'JMiHiiclin"^' Mie l)iiMine,;i;i of (,|ie corri- 
ninnil;y, luni lliiH ovej'plijn ruil/ur'nJIy rel,i)niH on liirn, lUit 
wliil<; ic,HH ni(>ney i;t rc.a.lly W)i,nl,i',d l,o e;-:e,cid>e IJie bnnincHH of 
Mie Mociel.y, lie, ifi cjiJIed on (,o fnininli J(,m much, or pioh/ihl y 
moi'<;. 'I'he del)(,n l,hoHe dcitiine- vviLli him lofinerly con|j;i,c,l,e(J 
liiive l,o he |);iid, while the HiiJcH of cortumodiUeH, Uie ni<',;i,fiH hy 
which ii, w)i,;i a,nl,ici|)jiJ,ed l.hnJ, |);u-|, of Uie fnndii fof l,li;i,(, |)Ji,y- 
menl, woid<l h(^ pr'ocnrecJ, hii,ve rriMcli diminiHhe,d. 

'i'he Hil/ii!i,l,ion of I, he h;),td<er he<',omeH Uiecefore ui Uiill Cfinin, 
vi'vy cril,ic)iJ. lie cn.nnol,, in jnf!l,ice l,o himficjf, <jrviu\i, n,\\ I, he 
re(jiiiHi(,c, n,<'-c()intnod)i,l,ion, )i,nd yet, hin refni,inin{^ froni doinj^ 
HO muHl/ n,|4'j4'C)i,vii,i,e exifil/inj^' cviln. Ah Hpec.je in, in hucIi ji, fi(,;i,Lc 
of Uiin^'H, I/he moul, deMicn.hle of connnodilJe.M, he hiiM reiwion to 
fe)i,r UiH/l/ H lur'f^-e |)orl,ion of hin money will he- fcd/urnerj on 
him, wliich he will hc/ i"e((nired to ref)l(W',e wll/h ^old or nilve.r, 
;umI he known th;i,t if ;i, MUMpicion of liin Holve.ney ;i,fiMe, he m!i,y 
he, (•(!(|nired tlniH to re|:)lji,c,e the whole of i(,. If he he, un!i/l)lc/ 
to ineet tlicHc dillicnltieH, hin l'ii,ilure JiddM vety rmjch lo tli<5 
jjener'id iriii,HH of miMfor'tiHie,, iijid f)i,rthe,r- dirriini;ilie!i pidilic 
coididenc,(t.' 

'riie n)i,t()f)d i,<',nninji,tion to iiuc,h !i, Mtji,te of thinfn, woid<J 



ol III ol,lic,i' |>ii,il,ii of Miiii iii(|iiiry, i I, [jciii;.^ ''n'.y '''"' |>''.(iiiii,iic,iil, caimcn (i,H'c.i:l,iiig 
l-li'' iiicffjiiHi! ii,iiil iliiriiniitjoii of Ml/f>(;l<, t,lial/ it/ wfiH ()n)|iono(| 1,0 iiiv<!Hl/ip;n,l,(!. 
()ii l.liJH ii,(;(;()iml,, \,\\i; view ln;l'ii ;.^iv(;M of plicnoirKUili. rciutHitlij.'^ iti a (.'fcii.t/ 
iiii-ii,ltiii'i-, fi-oiii fill; opcnilioii of l,c,iii[)oi'(i,fy i;ii,iiii(;n, in no(ri<: wli/i,t/ r,()iiliii<'i| and 
iin|i<Ml.:r,l,. 

I I Iciir'c, lor i:.<aiii|)l>',, I, lie, iiii li jcci, ol |)mi-, prolil, in a,liiioiil, wlioll y in-,/.'j(i(,!tO(l 
liy l;,ii,<-, ; l/iial, Ixiiii/^ <;HH(!iil,iii,liy ii, iiial,l,i-r- <|i',|)i',ii(|(;iil, on " l,i5in|>oi'ii,ry r,aiii(c,it,"] 

' I ll, 111 iiol,r,worUiy l/lial/ I'ik; (uuI ho ^^M/uipcd I, Ik; iiil,iiii,l,ion (;v<;ii a,l, l,li<; i;arly 
iinit! at/ which he wfol-o, Uial/ ho njfiniHiitilH Uial, it/ in a diircniiil/ oorl/ of (ircntiuro 
than a " I'un," wliich a w^lvcnL hanker i'lrnl oxfuirioiiwiH in LinicH ()i (iriHiM. J 

IJ 



306 APPENDIX 

seem to be the diininiition of contracts, and consequently of 
debts, progressively diminishing- the amount of payments, for 
which it is necessary to provide. This termination is retarded 
by the struggles of those whose real funds, in proportion to 
the extent of their business, are smallest, and whose motives 
to engage in fresh transactions, are chiefly the hopes of extri- 
cating themselves from the embarrassments in which present 
transactions have involved them. It is also more injuriously 
retarded, as has been observed, by the failure of those engaged 
in the business of banking. 

The liability of the mercantile community to be largely 
affected by such sudden pressures, must depend, in a great 
degree, on the peculiar circumstances of the country, and 
nature of the employments and trades carried on in it. 

It must also be dependent on the system of banking, that 
is there pursued, and its capacity to furnish funds where there 
is real capital ; to check unsafe and gambling transactions by 
withholding funds from those desirous of extending hazardous 
speculations, though deticient in capital ; and to pursue its 
operations steadily and confidently notwithstanding any 
general embarrassment. To attempt, however, an enumera- 
tion and comparison of the different systems of transacting 
the business of banking, which have been adopted in different 
times and places, would involve us in inquiries of so compli- 
cated a nature, that while to discuss them partially would be 
unsatisfactory, to do so fully would lead too far from our pre- 
sent object. I reserve therefore the few observations I have 
to make on the subject, to another place. 

PART 11. 

According to the view of banking given in the foregoing 
outline, it is an art which time, and what we call chance, 
have wrought out of the circumstances of European society, 
and the use of which is to quicken the exhaustion of instru- 
ments, by facilitating exchanges. But, according to this view 
of the subject, the consideration of two circumstances gene- 
rally combined with banking transactions, is omitted. The 
business of banking has been very often combined with the 



OF BANKING 307 

payment and receipt of the revenue of the state. Whatever 
the government receives, in lieu of the precious metals, or 
other commodities, in payment of the imposts it levies, will 
have the value of that for which it is taken in exchange. 
Government may so give the value of the precious metals to 
paper, or any other material, and, for its own convenience, 
may circulate the money which it in this manner issues 
through the medium of a bank. Thus the Bank of England 
may be said to be founded on the transactions of this sort, of 
the British government. This is, however, a circumstance by 
no means necessarily connected with banking. Indeed, I 
think there is reason to believe, that, from the great fluctua- 
tions thus introduced into what is called the money market, 
by the magnitude of the transactions of the state, the union 
of the two, when it takes place, operates injuriously on the 
general system of exchange of the country. 

The other circumstance to which I allude, is the exchange 
of the precious metals between different countries. Banks, as 
the great dealers in these metals, are necessarily exposed to 
the inconvenience of having to provide a supply for the 
demands occasioned by fluctuations in the business of differ- 
ent countries. Although, however, this circumstance is always 
more or less intimately connected with the business of bank- 
ing, it is not necessary for our purpose to examine the effects 
resulting from it. 

We may confine our attention, therefore, altogether to the 
consideration of the art, as a means of facilitating exchanges 
within any society. A brief statement of its condition in 
Scotland, a country in which, to judge from the circumstances 
attending its introduction, and the practical benefits arising 
from its operati(m, it has probably arrived as near perfection 
as any where, may sufficiently serve the purpose of showing 
the manner in which the mode of its operation may be 
explained by the principles I have endeavored to develop, and 
how it seems to attain the power of communicating the 
advantages it is capable of bestowing, and of avoiding the 
evils to which it is sometimes liable. The Scotch banking 
system is also better fitted for an example, both as it was the 
one directly presented to the observation of Adam Smith, and 



308 APPENDIX 

from which, accordingly, his ideas on the subject seem to be 
chiefly taken, and because it is not directly connected with 
the issue of government paper, or with the passage of coin or 
bullion from country to country. 

Banks in Scotland are both what are termed banks of 
deposit, and of circulation. They are the receivers and trans- 
ferrers of the money, or what is equivalent of the capital 
of others, and they are issuers of paper money of theii- own. 
Their business is confined to what is the proper occupation of 
bankers, transactions springing from the exchanges effected 
through the medium of credit. They avoid, therefore, to 
grant loans, unless for the purpose of facilitating exchanges. 
Previously, however, to examining the operation of the system, 
it may be well to direct our attention to the circumstances 
of the parties with whom bankers everywhere have to deal. 

When, in consequence of the business of banking being 
established on a sure basis, in any community, the system of 
credit comes extensively to prevail, the owners of the whole 
stock of the society are divided into two classes, the one 
consisting of those having in their possession a greater stock 
of instruments than what actually belongs to them, the other 
having a less stock than what belongs to them. The larger 
proportion of the owners of stock, belong sometimes to the 
one, sometimes to the other class, but the circumstances of 
many place them permanently in the one or the other. 

Individuals engaged in the forming, transporting, and ex- 
changing of instruments — the farmer's, manufacturers, and 
merchants of the community — have occasion to employ in 
their different businesses, sometimes a larger, sometimes a 
smaller stock of instruments or capital. At one time, for 
example, the state of the land the farmer cultivates, requires 
a great outlay for seed-corn, for tilling, and manuring it and 
for wages paid to laborers. At another time the returns from 
it in the shape of grain, fat cattle, and other instruments and 
commodities are proportionally great. At the former period 
the farmer may not have a sufficient stock of his own, and 
may wish to borrow certain instruments [or rather, the means 
to purchase them], at the latter he is in a condition to lend. 



OF BANKING 309 

In a similar manner, the fluctuations of business render a 
merchant sometimes a borrower, sometimes a lender. For 
example, two merchants in Great Britain are engaged in the 
timber trade, the one in that carried on with Prussia, the other 
in that with Canada. A change takes place in the business, 
from the duty on Prussian timber being lessened. The 
Canadian timber trade being thus no longer profitable, the 
merchant whose capital [funds] was embarked in it, with- 
draws it from that trade. He employs a portion in an 
experimental adventure to Prussia, but the larger part he has 
no immediate use for, and is, therefore, in a condition to lend 
to others. On the other hand, the merchant who had been 
accustomed to trade to Prussia, knowing the details of that 
business, and having a correspondence established there, is 
able to employ with advantage a much larger capital than he 
possesses. He wishes to borrow instruments, that is, com- 
modities to export to Prussia, and to have the use of ships for 
the double transport. Fluctuations, such as these, and in- 
numerable others, occasion continual variations in the stock 
which every merchant, or other individual engaged in any 
sort of business, is capable of employing with advantage. 
Sometimes, therefore, the business of every one is expanded 
much farther than his own stock would permit, at other times 
it is contracted into so narrow limits, as not to give employ- 
ment to the whole of it. 

Again, in every society there are many individuals who 
cannot themselves employ the instruments they own. A 
merchant, for example, dies, leaving a large stock of instru- 
ments of one sort or other to his widow, and young children. 
These they cannot employ. They must either convert them 
into cash, which, placing in security, they may gradually ex- 
pend as their occasions require, or they must lend them to 
others who will pay for their use. On the one hand, young 
men of ability, who have been bred to any business, although, 
perhaps, they may have very little or no capital, may yet be able 
to put instruments with which they may be entrusted, to so 
active use, that they may yield more than the ordinary returns, 
and so, after paying for the usual profits, may leave a consider- 
able surplus as the reward of their exertions. 



310 APPENDIX 

The Scotch system of banking seems well calculated for 
admitting the easy passage of individuals from the one to 
the other class. Its distinguishing characteristic is that 
the banker allows interest on all sums deposited, from the 
moment of deposit, and that, on sufficient security, he is 
always ready to grant the loan of as small, or as large an 
amount, as may be required. When he lends to individuals, 
by discounting bills, or by what are termed bank credits, he 
becou\es the real owner of a proportional amount of the stock 
of instruments they hold, and in this way may be said to be 
the owner of a part of the general stock of instruments of 
those dealing with him. equal to the amount of what he has 
lent. In reality, however, it is not altogether he who owns 
them, but rather they who have given him the larger part of 
his funds in the shape of deposits. These have all come to him 
with money in the form of coin, of paper money of other 
banks, or of his own money, or of an order for his own money, 
and in place of it have been content with a pledge that it shall 
be returned on demand, and that in the interim interest will 
be allowed on it. By this arrangement the banker, in effect, 
transfers to them a portion of his claims on the instruments 
held by those who are debtors to him, and part of his right to 
a portion of the returns made by them. Thus, while the 
merchant formerly trading to Canada, instead of employing 
the money he receives for sales of his existing stock of timber 
in purchasing other goods, and in freighting other ships for 
that market, pays it into the bank, the merchant trading to 
Prussia is drawing money out of the bank, for the purpose of 
extending his trade with Prussia. The effect produced is, in 
so fai'. similar to that which would have resulted from the 
Canadian trader lending part of his capital [(.lirectlyj to the 
trader to the Baltic. It differs from such a transaction, how- 
ever, in three respects : 1st. These two individuals might be 
unknown to each other, and might have no means of ascertain- 
ing their respective plans ; 2d. The merchant trading to Canada 
would probably have either less or more spare funds, than the 
merchant trading to Prussia required ; 8rd. He might, also, 
probably have occasion to call for them, for his own purposes, 
at a time when it might be inconvenient, or impossible, for the 



OF BANKING 311 

other to replace them. The banker, on the contrary, is always 
ready to i-eceive or to lend. 

Throughout all the occupations carried on by the different 
members of the community, similar circumstances occur. One 
tradesman, or mechanic, is laying by funds for building a 
dwelling house, another is expending all the funds he has laid 
by, and, perhaps, borrowing a little more, for the purpose 
of finishing a dwelling house. While the farmer is depositing 
in the bank some part of the proceeds of his sales of grain and 
cattle, the corn merchant and the butcher are drawing funds 
fr-om the bank, for the purpose of assisting them to purchase 
these commodities. 

It will thus be found, that the person making the deposit, is 
one who has just transferred to others, who can employ them 
at the moment to more advantage than fie, some instruments 
which he held, and that in return he receives a claim to that 
amount, on the funds [assets] of the bank, and of interest on it 
till paid. These funds, [assets] however, consist chiefly of 
debts owing to the bank by the community at large, and that 
interest is drawn from the profits arising from the stock of 
instruments effectively owned by the bank, and lent by it to 
the individuals with whom it deals. Hence the person making 
the deposit is one having transferred a part of his stock of 
instruments to an individual, and receiving in lieu of it a share 
of the clainj of the bank, on the general stock of instruments 
owned by those indebted to it. In this way the bank may be 
considered as a broker negotiating between those, the condition 
of whose business requires them to borrow, and those, the 
condition of whose business disposes them to lend, and general- 
izing the transactions of both. It is not by any means, 
however, only a broker. Besides the fluctuating deposits, it 
has a large capital of its own embarked in the business. This 
is chiefly owned by individuals whose circumstances place 
them permanently in the class of lenders, persons retired, or 
retiring from active business, or widows, etc., who, selling off 
their stock, employ their funds in this manner. 

This system probably yields as many advantages as any 
hitherto discovered, and avoids, as well as may be, the chief 
evils to which the business of banking is subject. 



312 AITKNDIX 

1. By means of it all possible exehauiies are made at the 
least expense ; and with the greatest facility. Every person 
is pix)mpted to sell because the money he receives yields an 
immediate return. Every person having- it in his power to 
turn any eounuodity to ofood account, has the n\eans atfordod 
him of obtaining possession of it. 

2. The capital [funds] which bankers own. or hold, is 
liable to be embarked atul U^st by them in imprudent specula- 
tions; or, tluxnigh partiality, to be lent to a few individuals 
who may squander it in the same manner. This seems to 
be best guarded against by there being numy stock holders, 
and a large capital. In the bt\nks to which we refer, this is 
generally, though not always the case. 

The knowledge which the banker acquires, by means of the 
system of bank credits, of the state of the attairs of those dealing 
with him, is probably somewhat greater than can be obtaint>d 
by the mere discount of bills. It gives him the sort of infor- 
mation, which one would acquire of the aftaii's of another, by 
having the care of his purse. I believe, also, that persons 
dealing with the Scotch bankers, are somewhat more strongly 
excited than those dealing with otlier Iwvnkei-s, to vigilance in 
providing funds to meet positive engagements with them, as 
the slightest failure of any individual in any such transaction, 
occasions his sureties being called on to pay up his cash 
account, ruins his credit, and renders it impossible for him to 
continue his business. It is pn^bable, therefore, that this 
system has considerable etficiency in checking rash and impru- 
dent speculations, by withholding funds from those most likely 
to run into them. 

3. The large amount of stock subscribed, and the subscribers 
being severally responsible to the amount of all the property 
they possess, give so great confidence in the stability of the 
banks, that nothing but some very great revolution in the 
atiairs of the society, or some great convulsion in the money 
market, would be suthcient to shake it. Owing to the system 
pursued, the possibility of any great disturbance of the money 
market is prevented. This forms the fourth circumstance to 
be noted. 

4. I have observed in the preceding part, that, when any 



OF BANKING 313 

reverse happens to the trade of a community, the diminution 
of sales which is the consequence of it, while it renders 
it necessary for those, whose business, as compared with their 
capital [ready money], is much expanded, to borrow money 
to meet the engagements which they have entered into, gives 
a redundancy of money to those whose business, as compared 
with their capital [ready money], is small, and who have 
contracted to receive a great amount of money, and to pay 
only a small amount. 

According to the system of banking which prevails in Eng- 
land, and in most countries, all individuals in the latter class 
will have a greater or less amount of cash lying by them 
useless. They are afraid to lend it, owing to the prevailing 
embarrassments, and, where the banker allows no interest on 
money deposited with him, they have no particular motive 
to induce them to lodge it in any bank. But, when a person 
intends to keep money lying by him, he will be apt to prefer 
coin, to paper, the former is the securest of any sort of pro- 
perty, the latter may possibly be insecure. He will more 
especially be inclined to prefer the former, if he have the 
least suspicion of the stability of the bank issuing the paper. 
It is thus that, at such seasons, what are called runs upon 
particular banks, are very apt to arise, and both to bring ruin 
on the bank, and increase the general embarrassment. But 
wherever, as in Scotland, the banker allows interest on all 
sums deposited, no one thinks of keeping money by him. The 
very classes too, it may be remarked, who are most apt to 
commence these runs, petty shop-keepers and tradesmen, 
have in Scotland, in general, bank credits, and are continually 
striving to put as much money into the bank with which they 
deal, as the necessity of their business will permit. In Scot- 
land, therefore, the banks, owing greatly, no doubt, to the 
guarantee of a very large capital prudently managed, but, 
also, as I conceive, in no inconsiderable degree, to the tendency 
of the system to bring into them all the spare funds of the 
society in the shape of deposits, have not for fifty years been 
exposed to any dangers or inconveniences of the sort, and in 
the midst of the severest commercial distress, and the ruin of 
the banking establishments of the sister kingdom, have always 



314 APPENDIX 

maintained their course steadily, and been able to apply the 
resources of the eonuuunity to carry those through the crises, 
whose embarrassments had arisen, not from the bankrupt 
state of their attairs, but from the pressure of the times.^ 

5. Banks have very often issued an overabundant supply 
of their particular money, and it has been depreciated. An 
etfectual remedy for this, one would be inclined to conceive, 
would be their being obliged to convert it, on demand, into 
gold or silver. Many persons, however, do not think that 
this is sufficient, and believe, that, notwithstanding, an over 
issue may take place. If so, the Scotch system, by its ten- 
dency to return on the bank all money not in immediate 
use would seem to be a pretty etlective check on the occur- 
rence of such an evil. 

Banking may be litly described, as a generalization of indi- 
vidual credit transactions. Every system of banking general- 
izes them to a greater or less extent. The more complete the 
generalization, the more completely does the system perform 
its functions, and the nearer it comes to the perfection of 
art. The Scotch system, viewed as an art of this sort, seems 
to discharge its function well. Whatever spare capital [funds] 
the turns of business may there throw into any individuals 
hand, he finds it for his advantage to place in the bank ; what- 
ever additional capital [funds] they may require of him, he 
easily procures from the bank. The facility with which it 
operates may be best seen, by contrasting it with the English 
system. 

In Encrland, an individual dealing with a banker, is 
expected to leave in his hands an amount of capital [funds] 
as a deposit, for which he receives no interest. It is from tins 
that the profit of the banker is derived. When, therefore, 
a person in the course of business has a greater portion than 
usual of unemployed capital [funds], he finds there no im- 
mediate advantage in placing it in the banker's hands. He, 
therefore, probably, will not place it there so promptly, as he 
would in Scotland. The efiect of this tardiness is more 
especially felt at those critical periods to which I have referred 

^ See the correspondence between Lord Liverpool and the Chancellor of the 
Exchequer and the Bank of England, in 18*26, in Hansard's Debates. 



OF BANKING 315 

in the preceding part, when, in consequence of a general 
decrease of the amount of sales, persons whose means [affairs] 
have been most expanded, are under the necessity of borrow- 
ing to a larger extent than they had anticipated. If, on such 
occasions, they whose business has been contracted within 
narrower limits than their capitals [means] would have ad- 
mitted, and who, in consequence of avoiding to purchase, have 
a larger surplus capital [purchasing power] than usual in their 
hands in the shape of money, retain it there, instead of placing 
it in the bank, the banker is restrained from making the 
advances he otherwise would, and a violent check is given to 
the operation of the credit system, sufficient to give a begin- 
ning to convulsions more extensively deranging it. 

This system, also, as compared with the English, adjusts 
itself with greater precision to the actual circumstances of the 
two great classes of the community, the lenders and borrowers, 
to whose transactions it serves as the instrument. When, in 
consequence either of the progress of accumulation, or of 
misfortunes befalling the industry of the country, instruments 
are placed in more slowly returning orders, and profits fall, 
borrowers should pay less, and lenders receive less, for the 
use of capital. And reversely, when profits rise, more should 
be paid by the one class, and more received by the other. 
This is naturally brought about where a certain rate is paid 
for funds deposited, as well as for those drawn. Under such 
a system the banker cannot afford to have any capital [any 
money beyond the necessary reserve] lying dormant. He 
must, therefore, preserve the proper proportion between the 
funds deposited in his hands, and those drawn out of his 
hands. When the former become too great, which will be the 
case when trade is dull, he lowers the rate of interest which 
he charges his customers, and, also, that which he gives them, 
and thus diminishes the amount deposited, and increases that 
drawn. He does just the reverse and produces directly opposite 
effects, when trade becomes more lively, and profits rise. In 
England, on the contrary, the state of trade has no direct effect 
on the interest which bankers charge, and the due proportion 
between borrowers and lenders is not so well maintained.^ 

^ Joplin on Currency, p. 108. 



316 APPENDIX 

Tlie advantages derived from any system become apparent, 
by considering the consequences that would result from its 
being abolished, or from its actions being impeded. On this 
account I shall state three hypothetical cases, with regard to 
the system which we are now considering, as an example of 
the effects of banking in general. 

In the year 1826 it was proposed in the British Parliament, 
to enact a law putting a stop to the circulation of one pound 
bank notes, the chief money of Scotland. The bankers main- 
tained that in this case they would no longer carry on 
business. Let us suppose, that the proposal had been adopted, 
and the effect had really been utterly to abolish the business 
of banking in that countr}^, and unless in barter, to make 
all buying and selling to be transacted in coin, either in ready 
cash, or in cash paid when the period, to which credit had 
been limited, expired. 

In considering the effects of such a change, we may divide 
all transactions now taking place in Scotland, and concerned 
in the question, into those effected by bank bills, or as they are 
termed, bank notes, and those effected by checks on some bank. 
1. Of those now effected by bank bills, of which the 
majorit}^ are what are called one pound notes, [it may be said 
that without these bills,] every purchaser, that is, every person 
in business, would be obliged to have continually lying by 
him, to answer occasional demands, a certani sum [of actual 
money] proportional to the extent of his business, and when 
preparing for some extraordinary occasion, for a length of 
time previous he would be collecting and hoarding up funds 
sufficient for the purchase or purchases he intended making. 
A large part of the money of the country, would, therefore, be 
constantly lying idle, doing nothing, but waiting for something 
to do. Let us suppose that we are in Scotland at the present 
moment, and that bank notes being able to hear and answer 
questions, we take at random a parcel of one pound notes, and 
interrogate them as to what their employment is, and how 
they discharge it. They would doubtless answer: "the service 
we render is to pass from hand to hand, for the purpose of 
making exchanges." "Do you ever lie idle for any time?" 
" No. Every one that gets hold of us innnediately passes us 



OF BANKING 817 

to some other person, either to pay some debt, or to make 
some purchase, or if not, carries us to the banker, who sets us 
out again on the same round. Sometimes, indeed, we get 
a few days, or a few weeks rest, in the desk of a small country 
dealer, or some such person, who has to wait that time, 
perhaps, before he can collect a dozen of us to send to the 
bank, but this is seldom, and as it were by chance." Let now 
the banks be done away with, and, instead of bank notes, let 
us have to ask the same questions of sovereigns. Their 
answer would be, " we are employed in the service of people 
who collect us for the purpose of buying some thing, or things, 
with us, when the chance presents itself. We are lying 
continually idle, therefore, for longer or shorter intervals, 
waiting till this chance cast up. Sometimes we are collected 
in money bags for weeks, sometimes for months, and unless 
when we get into the hands of very necessitous persons, we 
each of us expect to be put by in some place of security, along 
with others of our brethren, and with them to wait the chance 
of being called out to effect some exchange, after which we 
again return for a time to inactivity." 

What in the supposed cases must be true of a particular set 
of bank notes, or a particular set of sovereigns, would be true 
of all bank notes, and of all sovereigns, and hence the amount 
of exchanges effected in any particular year, by means of 
three and a half millions of bank notes (about the present 
circulation of Scotland), must be far greater than would be 
effected in the same time, under the suppositions we have 
made, by three and a half millions of sovereigns. The latter 
could not both be effecting exchanges, and lying idle. 

2. But, besides the exchanges made by means of bank notes, 
a great amount of exchanges are effected by orders or 
checks on the banker. Were there no banking system there 
in existence, these, also, would have to be effected by the 
medium of money, either ready money, or money paid after a 
certain time, but certainly, in some way or other, through the 
instrumentality of money. There would require, then, to be 
a farther provision of sovereigns, to effect the large amount 
of exchanges now managed by a few strokes of the pen of 
a banker's clerk. 



318 APPENDIX 

What would be the addition which these two circumstances 
would render it necessary to make to the circulating medium, 
in order to bring sovereigns to approximate in efficiency to 
the bank notes, the place of which they occupied, might be 
difficult to determine. The proportion of the one to the other, 
might be as 3 to 2, as 4 to 2, as 6 to 2, or as 8 to 2, or perhaps 
still higher ; it is very certain, however, that the one would 
be much greater than the other. After all, it would only be 
an approximation. As what will happen can only be con- 
jectured, not known, every person engaged in business would 
occasionally err in his calculations, and would sometimes have 
commodities offered him which he would wish to purchase, 
but for want of cash would be unable to purchase. The two 
circumstances referred to, the additional expense of exchanges, 
consequent to the additional money [specie] necessary to effect 
[any given amount of] them, and the diminution of exchanges 
consequent to the want of the money [conventional means 
of payment] necessary to effect them [expeditiously], united, 
would mark the direct loss the community sustained by the 
abolition of the banking system. The indirect loss would 
arise from the check given to the accumulative principle, by 
the diminished quickness of return of instruments — by what 
would be termed the dullness of trade — and the diminished 
accumulation of stock consequent to it. 

But such a supposition as that we have made, could not 
possibly come to be a reality. When the art of banking has 
once been introduced into a country, the advantages resulting 
from it, are too great to admit of its being altogether abolished. 
There will always be some generalization of credit transac- 
tions, some recognized mode of transferring from hand to 
hand, promises to pay, made by one individual to another. 
The enactments of the legislator may act on the art so as to 
make it more or less effective, but they cannot prevent the 
practice of it. I shall, therefore, make another supposition, 
and assume that the measure proposed having been adopted, 
sovereigns took the place of bank notes, and that, notwith- 
standing, the banks continued their operations as before. 

In this case the banks, by the supposition, giving sovereigns 
out, and receiving them again, in the same manner as they 



OF BANKING .319 

liad tJioir own notes, tlie community in ganaml would have 
been sensible of no other alteration but that of handling gold 
instead of paper, and they would have had the advantage of 
some additional security against the danger of the failure of 
the banks, and against disorders consequent on drains of gold 
from abroad. But this supposition, also, is inadmissible. The 
diminution of tbe paper money issued by the bankers, would 
have proportionably diminished their profits. The amount of 
one pound bank notes there circulating, being something over 
two millions, their circulation would probably bave been 
curtailed Ijy tbe measure by ruairly two millions. This at five 
per cent, is ncjt much sliort of half of what they make by 
the whole funds deposited in their hands, which have heen 
estimated at about twenty millions, and on which they gain 
one per cent., the difference Vjetween what they charge those 
who borrow from them, and which they give those who lend 
to them. Their profits must, therefore, have been greatly 
diminished by the measure, and unless we suppose that bankers 
in Scotland have more tban the ordinary profits of stock, 
wbich, where there is so active a competition, cannot well be, 
capital would have been withdrawn from the business,^ or the 
business would have undergone a change. It is probable that 
the latter circumstance would have happened. The banks 
would either have made more than one per cent, difference 
between what they allowed and what they charged for money, 
or, as is more likely, they would have changed the system of 
bank credits. The business of the small dealers, tradesmen 
and farmers, who have credit with the banks, is transacted 
mostly by one pound notes. Bank bills exceeding five pounds 
rarely pass into their hands. Under the supposition, there- 
fore, this class would have circulated but very little of the 
banker's paper ; he, consequently, would have declined grant- 
ing them credit, in this way, and confined his credits of this 

1 It may be observed, that there is a great difference between Great Britain 
and the United .States in this respect, because in Great Britain the govern- 
inent funds [debts] afford an advantageous investment for the capitals of in- 
dividuals, widows, etc., who in this continent are under a sort of necessity of 
placing it in banks. In this, and in many other respects, as in the distance 
from other nations, and the increased flifficulty in replenishing the stock of 
bullion when exhausted, the situation of the two countries is very different. 



320 APPENDIX 

sort to merchants and others, whose transactions being large, 
made them the circnlators of the paper to the issue of which 
he was contined, and whose business, consequently, would have 
been more profitable to him. The facility of exchange among 
the small dealers would have been greatly abridged, and 
through it, that among the whole community would have 
been somewhat lessened. The real amount of loss that would 
have been in consequence sustained, it is not necessary to our 
purpose to attempt to fix. Almost all persons practically 
acquainted with the business of the country, believed that it 
would have been very considerable, and, in consequence of 
their urgent representation, the measure in contemplation was 
abandoned.^ 

If I have succeeded in placing clearly before the reader my 
ideas concerning this somewhat intricate subject, he will, I 
think, perceive, that there exists an essential ditlerence 
between the nature and operation of the money of the 
banker, and that of other money. 

In communities where the art of banking lias no exist- 
ence, money may be defined to be a commodity, of which 
every person in the habit of making [many] changes, keeps 
a [considerable] supply by him, for the purpose of eftecting 
them. 

In a conmiunity, again, where the art of banking has been 
established, as in the instance of Scotland, if we confine our 
attention to those who have dealings with the banker, the 
money he issues - may be fitly described as counters which he 
gives them for the purpose of arranging their transactions 
with one another, and which they return to him immediately 
they are arranged, that they may be rated on his books 

' [Rae neglects to mention one circumstance much emphasized by recent 
writers, that is, that the one-pound note in Scoth\nd is quite necessary to 
enable the banks to maintain their extensive system of branches, which carry 
reliable banking facilities even into the smallest hamlets. The small bank- 
note furnishes a cheap " till-mouey," without which branch banking on any 
large scale is too expensive.] 

- [That is, the money which he paj's out and receives. " Bank money " in 
this paragraph is not " banker's money,"' that is, bank credit currency which 
we ordinarilj' speak of as being " issued " ; it is actual money, specie, as used 
in connection with a system of banking. See below.] 



OF BANKING 321 

according to the place they occupy as borrowers of part, or as 
owners of part, of the general funds which he holds. An in- 
dividual who has a deposit in a bank draws from it, we shall 
say, the sum of £1,000, and lessens by that amount the 
deposits in the bank, and for which it has to pay interest. 
But, of course, he intends to put it to some use, that is, to 
make some purchase or purchases with it, or pay for some 
before made. The person or persons to whom, for this pur- 
pose, he transfers it, by the supposition dealers with the bank 
if they have no immediate use for it, will directly carry it to 
the bank, and then the general deposits and loans of the bank 
will be the same as before, but the bank accounts of the parti- 
cular depositors and borrowers engaged in the transaction will 
have suffered an alteration. If, on the other hand, any of 
those individuals, among whom the £1,000 is distributed, or 
all of them, have use for the sums they receive, that can only 
be to make some immediate purchases, or to pay for some 
before made. In this way, after passing through a less or 
greater number of hands, the £1,000 the banker has issued 
finds its way back to him, and, as far as his business is con- 
cerned, he is exactly in the same situation as before he issued 
it. The situation of the person who took out the money, and 
that of them who return it, is altered. One holds a greater 
stock of instruments, and the debtor side of his bank account 
is proportionally greater, the others hold a less stock, and the 
•credit side of their bank accounts are proportionably greater. 
The formgr has transferred a part of his claim on the general 
stock of instruments, and has in lieu of it the possession of 
some particular instrument or instruments, and the latter 
have done the reverse. The bank money, therefore, has 
merely served the place of counters, by aid of which the 
customers of the bank settle their transactions, and finally 
determine their relations to its stock. During the time these 
transactions were in progress, there was a proportional 
diminution in the amount of interest which the bank had 
to pay its customers, and, if the counters it gave them were 
merely pieces of paper costing it little or nothing, this 
would be so much clear gain to it ; if they were gold, the 
expense of procuring them would exactly balance the gain. 

X 



822 APPENDIX 

If there be a plurality of banks, as the bankei"s in that case 
exchange their notes with one another, the sei'ies of transac- 
tions produced are substantially the same, unless in so far 
as the business of one bank may be extending, that of another 
contracting, a circumstance which is generally of little 
moment to the community. 

It is only when the banker's money passes out of the range 
of those having transactions with him, that it comes to hold 
the place of other money. While it is in their hands, it 
performs the oflfice that other money would, and in this 
respect, if it be paper money, he gains an advantage not 
directly springing from the exchanges managed by his funds. 
Individuals, however, who do not deal with any bank, where 
banking is properly managed, are persons whose at^'airs do 
not require them to keep [nuich] money by them, and by the 
agency of both classes, it is, therefore, preserved in continual 
motion and employment. 

I have entered into a longer detail on this subject than 
I had intended, from my desire to make apparent the distinc- 
tion stated above, in regard to the superior ethciency of 
the money which the banker puts into circulation,^ whether 
paper or gold, as compared with that which exists where the 
art of banking is unknown, and where there is either no 
generalization, or an imperfect generalization of transactions 
performed through the medium of credit. 

It will be seen, that the view I have attempted to give 
of the whole subject of exchange, is quite opposed to that 
exhibited in the Wealth of Nations. Adam Smith sets out 
fi"om exchange, and makes it, and the division of labor conse- 
quent on it, the source of stock, whereas I have endeavored to 
show that exchange is the result of the increase of stock, and 
subsequent division of employments, that the necessity for its 
existence is a circumstance retarding the increase of stock, 
and that the benetits of the art of banking spring from the 
facility which that art gives to the pi-ocess. 

1 [Apparently John Stuart Mill followed Rae in that passage of his Princiitles 
(Bk. III. c. III. sec. 3), Mhei'e he speaks of the "efficiency of money " as 
an expression in some degree preferable to "rapidity of circulation.''] 



OF BANKING 323 

As exchange may be said to be the commencement of Adam 
Smith's system, and as money is the instrument of exchange, 
he assumes it as a first principle, that while the exchanges 
remain the same, the same amount of money is necessary to 
transact them. Bank paper, he, therefore, concludes, will 
exactly equal in nominal value the specie circulated before its 
issue. If it exceed this amount, it will return upon the bank, 
if it fall short of it, the vacancy will be filled by specie. This 
principle, which Adam Smith, as is observed by Mr. Say, has 
introduced into speculations on this subject, is thus epitomized 
by the latter author : 

" Taking it for granted, then, that the specie, remaining in 
circulation within the community, is limited by the national 
demand for circulating medium ; if any expedient can be 
devised, for substituting bank notes in place of half the 
specie, or the commodity, money, there will evidently be a 
superabundance of metal money, and that superabundance 
must be followed by a diminution of its relative value. But 
as such diminution in one place by no means implies a con- 
temporaneous diminution in other places, where the expedi- 
ent of bank notes is not resorted to, and where, consequently, no 
such superabundance of the commodity, money, exists, money 
naturally resorts thither, and is attracted to the spot where it 
bears the highest relative value, or is exchangeable for the 
largest quantity of other goods ; in other words, it flows to 
the markets where commodities are cheapest, and is replaced 
by goods, of value equal to the money exported." ^ 

He goes on to prove that the national capital must be 
augmented by the specie exported, and fixes the utmost quan- 
tity by which it can so be increased, at one tenth of the annual 
product or revenue of the nation. 

Now I maintain, that to effect the same transactions, it 
requires far less banker's money, whether that money be paper 
or specie, than was required of the money in existence before 
the establishment of banks, the celerity of motion making 
up for the deficiencies of quantity ; that what Adam Smith 
asserts concerning the comparative efficiency of the two kinds 
of money circulated by consumers and dealers, holds true of 

1 Say, B. I. c. XXII. Am. edit. Vol. I. p. 246. 



S24 APPENDIX 

that money [even thoug-h it be specie alone] of which the bank 
forms the centre of circulation, as compared with that, which, 
where there are no banks, circulates slowly and after intervals 
of inactivity between dealer and dealer; that the one by 
" a more rapid circulation, serves as the instrument of many 
more purchases than the other"; and, consequeptly, that if the 
same number of transactions only takes place after the estab- 
lishment of banks, as before their introduction, then nuich 
less monej^ will be necessary, and if the same money be circu- 
lated, the fact indicates, that a o-reat addition has been made 
to the business transacted, and still more if the money 
circulated exceeds that formerly circulated. It is this last 
event, that, I conceive, lienerally takes place. In this, as in 
other instances of real improvements, the [ultimate] etiect is 
contrary to what might have been anticipated, the greater 
facility in performing the operation bringing so much greater 
a compa*^s of materials within its reach, that the occupation 
given to the art, instead of diminishing, increases, and by the 
subdivision of employments, and abandonment of barter, money 
comes to be so nnich more used as an instrument of exchange, 
that on the whole, the quantity of it employed is augmented, 
in the same way, as when a road is much improved, though 
one horse may be suthcient to transport what three did before, 
yet the commodities transported so increase, that there are, 
notwithstanding, thrice the number of horses employed.^ This 
is especially the case in new countries, where, from causes 
already specified, money before the existence of banks is 
excessively scarce. 

If the reader have still any doubts on the subject, he may, I 
conceive, satisfy himself of the accuracy of this view, by refer- 
ence to the pages of the Wealth of Nationt^ itself. Adam 
Smith, by no means, limits the advantages of banking as 
practised in Scotland, to the substitution of paper for specie, 
and the direct fictitious capital thus created. On the contrary, 
he thinks that every person dealing with the banker, that is, 

' [This tlieory of displacement and expansion respecting emploj-ment for 
actual money in a community making extensive use of banks, may be further 
developed. See the article ou the "Distribution of Money," by Frof. 
(.). M. W. Sprague, in the Quarterly JournaJ of Economict>, for August, 1904.] 



OF BANKING 325 

every person engaged in business, derives individually very 
great advantages from the system. These advantages are re- 
solvable into the circumstance, that every such person is free 
from the necessity of keeping any money by him. Whatever 
demands are made on him he answers by means of his cash 
credit, or by discounting a bill, or bills. In this way " partly 
by the conveniency of discounting bills, and partly by that of 
cash accounts, the creditable traders of the country are dis- 
pensed from the necessity of keeping any part of their stock 
by them unemployed, and in ready money, for answering 
occasional demands." ^ Now it is certainly very remarkable, 
that it did not strike Adam Smith, that if all the creditable 
dealers in the community, that is, the great majority of those 
who before the establishment of banks would have kept money 
by them, will by the facilities given by the art, be dispensed 
with the necessity of doing so, and can still carry on equally 
extensive transactions, the money requisite to transact the 
general business of the country must be diminished by that 
amount. If, for example, according to the estimate he makes, 
the specie in circulation in Scotland before the introduction of 
banking was about one million sterling, after the establish- 
ment of that art, had the exchanges effected remained the 
same, a much less sum than one million would have been 
sufficient to perform them ; for all that money would have 
been useless which it had before been necessary to keep in the 
coffers of the different dealers, and which formed the great 
mass of the then circulating medium, or rather of the medium 
[half circulating and half stagnating] through the interven- 
tion of which exchanges were transacted. If, then, a million 
had been still employed, — if a million of the banker's paper 
had superseded a million of coin, — it would have indicated, 
as I have stated above, a great increase in the transfers 
affected, and would have shown, either " that a larger compass 
of materials had been brought within reach of the accumulative 
principle, or that employments had been more subdivided, or 
that both circumstances had occurred." 

According to Adam Smith, the bank saves each dealer from 
keeping by him in ready money, all that amount which it 

1 Book II. c. II. 



826 APPENDIX 

advances him by means of the cash account it opens with him, 
or by discounting the bills he pi-esents. What in this way, 
then, all the banks advance to all the dealers, deducting from 
it the amount of paper circulated, must be so much which 
they save them from being obliged to keep by them. But 
this is the employment to which, where banking is properly 
conducted, bankers devote their whole funds, and by this mode 
of reckoning, the saving effected by them in Scotland might 
be made to appear equal to thirty millions of specie. Were 
banking, however, as a distinct business, totally abolished in 
that country, the event certainly would not bring into it 
thirty millions of specie. The effects produced by such an 
event would consist in a diminution of the number of ex- 
changes, and, consequently, of the division and subdivision of 
employments, and of the capacity given to materials ; [and 
also the bringing about of] the transaction of many exchanges 
by barter, and the generalization of a large amount of them 
by transfers from hand to hand. Specie would only come in, 
in sufficient abundance to make up the balance.^ 

To conclude ; in my opinion the notion from which Adam 
Smith sets out, and which, since his time, has kept possession 
of all speculations on this subject, and been the foundation of 
many important practical measures,- is essentially erroneous. 
According to him, there is always a certain sum of money 
necessary to carry on the transactions of every society, the 
amount of which is proportioned to the transactions carried 
on. This is termed the circulating medium, and, whether it 
be bank paper, or specie circulated by the banker, or coin used 
for the purposes of exchange where there is no bank, it is 
reckoned always in quantity proportioned to the transactions 
carried on. On the contrary, it seems to me, that when once 
a bank is established in any community, the money circulated 

■^ [Of course these last statements ai'c exaggerated. Not the same amount of 
business, to be sure, but something like the same amount would still be trans- 
acted on a lower range of prices. But it is nevertheless true that one effect of 
the supposed occurrence would be to introduce barter to some extent, along a 
margin of the use of money, where barter did not before exist.] 

-As for instance, the contraction of issues by the bank of England in 1826, 
(the immediate cause of the disasters of that year,) and the legislative enact- 
ments on British currency for the last twenty years. 



OF BANKING 327 

among those who are its customers, serves merely the purpose 
of counters for arranging their transactions, performing the 
same part as a multiplicity of checks, operating upon their 
several accounts, might accomplish. It is not a fund kept for 
making exchanges, but an instrument applied for [and 
brought into use] at the time exchanges are to be made, and 
operating upon the real fund kept for that purpose, viz., the 
<;laim which the bank has on the general stock of the com- 
munity, the specie deposited in its vaults, and the other items 
making up its capital [assets], which, like the coin in the 
old deposit banks of Italy and Holland, constitute that part of 
the general stock, really performing the function of exchange. 

If this be the case, it follows that the more perfect as an 
art banking becomes, the less, other circumstances being equal, 
is the amount of the circulating medium required, and the 
greater the saving to the community. It also follows, that 
a system of banking, considered merely as a means of trans- 
acting exchanges taking place in the ordinary course of affairs 
within the community, approaches nearest to the excellence 
of art, when it most effectually secures its funds from being 
squandered, and when the counters employed by it in its 
operations, issue from it, pass through the hands of its 
customers, and find their way back to it most easily and 
quickly. The former circumstance diminishes the risk of loss 
from this mode of effecting exchange, the latter diminishes the 
expense of it. 

It may farther be observed that the popular notion, that 
the advantages of banking are limited to the substitution of 
paper for specie, and the creation to that amount of a fictitious 
capital is altogether erroneous. The advantages derived from 
this source are rather contingent, than essential. They fall 
chiefly to the banker, and, as he may be considered as a 
broker having the care of the funds of certain of the lenders 
of the community, for the purpose of distributing them among 
the borrowers, and having to be paid for the trouble, the 
expense, and the risk of loss attending his business, this mode 
of paying him may be the most convenient that can be 
devised. The real advantage however of the art, arises from 
its [efficient] application of the floating loans [that is, the 



328 APPENDIX 

funds possibly available for making loans] of the society ta 
the purposes of exchange ; and, instead of the paper money 
issued being the cause and the measure of the good derived 
from it, the less the quantity of such money, in proportion ta 
the business transacted vi'ith it [that is, the greater the 
amount of transfer of credits on the books of the bank in place 
of issue of notes], the smaller the expense of the business of 
exchange to the trading community, and the greater the 
benefits the banker bestovs^s on it. And, again ; in cases where 
bank paper makes the general currency, instead of the partial 
or total abolition of banking, only requiring the substitution 
of a quantity of specie equal to the paper withdrawn from 
circulation, it would, in proportion, as it were partial or total, 
compel the substitution of a much larger quantity of specie, or 
a proportional diminution of the exchanges before transacted ; 
and, in either case, would place the instruments belonging 
to the society in more slowly returning orders, lessen the 
amount of materials within reach of the accumulative prin- 
ciple, and eventually occasion a proportional diminution of the 
national stock. 



i 



AETICLE V. 

OF THE WEALTH OF NATIONS AS A BEANCH OF THE 
PHILOSOPHY OF INDUCTION. 

[OF THE SPIEIT AND METHOD OF SCIENCE.] 

It will be perceived that there is an essential difference between 
the modes of investigation which I have followed in the pre- 
ceding pages, and those guiding the speculations of the celebrated 
philosopher, from whose opinions I venture to dissent. Where 
the principles of investigation are different, the conclusions 
arrived at can hardly agree ; and I scarce think, therefore, that 
I should assist the reader in forming an opinion on the sub- 
ject, by entering into a particular discussion of the points in 
which we are at variance. The views I have endeavored to 
unfold must, in so far, stand alone. 

It so happens, however, that concerning the principles of 
investigation themselves, there is a common standard to which 
the disciples of Adam Smith refer, and on the rules drawn 
from which, I also conceive, the determination of the questions 
debated must ultimately rest. Adam Smith has been said to 
have made political economy a science of experiment, a branch 
of the inductive philosophy.^ Now, I apprehend, that the 
spirit of the philosophy of the author of the Wealth of Nations 
was completely opposed to the inductive philosophy — the 
philosophy of Bacon, and that he never intended that that 
work should be received as if established on it. If the reader 

^ Say's Introduction and note on Storch, p. 23, tome I. 



380 APPENDIX 

agree with me, he will probably consider that the whole dis- 
cussion here, in a measure terminates. In placing before him 
the reasons for my belief, I shall confine myself, as much as 
possible, to transcribing the words of the Novum, Organum, on 
the one side, and those of Adam Smith, in some of his specula- 
tions, on the other. 

Lord Bacon affirms, that there always have been, and must 
be, two sorts of philosophy — the popular, and the inductive ; 
or, as they might perhaps be denominated, the philosophy of 
system, and of science. In the one, the mind explains natural 
phenomena according to its preconceived notions, in the other, 
it traces out, by a careful interpretation, the real connexions 
between them.^ The former will always be the more popular, 

1 " Nos siquidem de deturbanda ea, qute nuuc floret, philosophia, aut si quae 
alia sit, aut erit, hac emendatior aut auctior, minime laboramus. Neque 
enim oflBcimus, quin philosophia ista recepta, et alise id genus, disputationes 
alant, sermones ornent, ad professoria munera, et vitse civilis compendia, ad- 
hibeantur, et valeant. Quin etiam aperte significamus, et declaramus, earn 
quam nos adducimus philosophiam, ad istas res admodum utilem non futuram. 
Non prajsto est ; neque in transitu capitur ; neque ex pra^notionibus intellectui 
blanditur ; neque ad vulgi captum, nisi per utilitatem et effecta descendet. 

Sint itaque (quod felix faustumque sit utrique parti) dute doctrinarum 
emanationes, ac dute despensationes ; dute similiter contemplantium, sive 
philosophantium tribus ac veluti cognationes ; atque illae neutiquam inter se 
inimicffi, aut aliense, sed foederatae, et mutuis auxiliis devinctfe ; sit denique 
alia scientias colendi, alia inveniendi ratio. Atque quibus prima potior et 
acceptior est, ob festinationem, vel vitae civilis ratioues, vel quod illam alter- 
am ob mentis infirmitatem capere et complecti non possint (id quod longe 
plurimis accidere necesse est,) optamus, ut iis feliciter et ex voto succedat, 
quod agunt ; atque ut quod sequuntur, teneant. Quod si cui mortalium cordi 
et curse sit, non tantum inventis haerere atque iis uti, sed ad ulterioi'a pene- 
trare ; atque non disputando adversarium, sed opere naturam vincere ; 
denique, non belle et probabiliter opinari, sed certo et ostensive scire ; — Atque 
ut melius intelligamur, utque illud ipsum quod volumus ex nominibus im- 
positis magis familiariter occurrat ; altera ratio, sive via, anticipatio mentis ; 
altera, interpretatio naturce, a nobis appellari consuevit." Praef. II. Instaur. 

" Utcunque enim varia sint genera politiarum, unicus est status scien- 
tiarum, isque semper fuit et mansurus est popularis. Atque apud populum 
plurimum vigent doctrinae, aut contentiosce et pugnaces, aut speciosas et 
inanes ; quales videlicet assensum aut illaqueant, aut demulcent." Prief. 
Inst. 

" Quinetiam significamus aperte, ea, quae nos adducimus, ad istas res non 
multum idonea futura ; cum ad vulgi captum deduci omnino non possint, nisi 
per effecta et opera tantum." Lib. I. c. xxviii. 



OF SCIENCE VERSUS SYSTEM-BUILDING 331 

and on account of its facility of explication, and its fitness for 
the purposes of argument, will maintain its place in the dis- 
cussion of all subjects of general interest ; while the latter 
must be confined to a few, its spirit being difficult to seize, 
above the grasp of the commonalty, and only to be com- 
prehended by them in its effects. 

It is not difficult to perceive the foundation on which each 
of the two systems rests. 

Necessity obliges men to attend to the phenomena around 
them, to mark their actual successions, and to name them. 
They have thus a store of general facts, and of regular expres- 
sions for them. These, however, refer not to the laws of the 
general system themselves, but to the phenomena or events, the 
consequences of those laws. 

Their farther discussion regarding them may be undertaken 
for the purpose either of explaining, or of investigating them. 
If for the former, they will refer to principles already ad- 
mitted ; that is, to known modes of succession. If for 
the latter, they will search for the causes on which those 
common successions proceed. An example will render this 
plain. 

In the earliest stages of society, and before speculation com- 
menced, men would make some general observations concerning 
the motions of the different bodies about them. They would 
observe, for instance, that, unless prevented by some obstacle, 
most bodies fall to the earth. Adopting this observation as a 
general rule, when they saw one so falling, they would con- 
ceive of the event as a usual or natural occurrence. A savage, 
when, in traversing the forest, he sees a rotten branch break 
off and fall to the ground, thinks of it as an event which 
is a necessary consequence of its nature, and, if his language 
furnished the expression, might say it was a natural motion in 
it as a heavy body. Were he to see the same broken branch 
moving rapidly through the air upwards, or horizontally, he 
would conceive of it as not proceeding from its own nature, 
but from some disturbing cause, and might call it a motion 
produced by violence. He would observe, too, that some sub- 
stances, as air, and what he calls fire, rise upwards. He would 
so conclude, that all light bodies ascended. In the same 



332 APPENDIX 

maimer, the heavenly bodies seem to him to have naturally a 
circular motion. 

Let us now suppose that the two sorts of philosophy : 1st. 
the explanatory or systematic, and 2d. the inductive or scien- 
tific, in pursuit of their respective objects, apply themselves to 
the consideration of the complicated series of phenomena, con- 
nected with sensible motions of all sorts. 

As what is conceived to be already known requires no 
explanation, the philosophy of system takes things which, 
because familiar, are admitted as obvious, as the media for 
explaining all other things. To do otherwise, were to under- 
take a work foreign to its objects. In this way, under its 
hands, the practical rules of the observer, become the specula- 
tive principles of the philosopher. Motion is diNdded into 
natural, and violent. Certain bodies have a natural tendency 
downwards, others upwards, others to move in a circle. From 
these principles, the whole phenomena are explained in a 
plausible manner, and arranged in a systematic form. Such 
was the plan of the philosophers of Greece, and such their 
pseudo science of motion. It is evident, that however it 
might systematize and explain facts already known, it could 
not conduct to new truths. It could not lead farther than the 
principles from which it set out, and these evidently embraced 
not the laws of the general system of things, but only circum- 
stances, the results of those laws. 

The philosophy of induction has for its object the discovery 
of truth. It seeks for the laws regulating the general system. 
As it is the aim of the other to explain plausibly, its aim is to 
investigate strictly. What, consequently, are to the one ulti- 
mate principles, are to the other collections of facts, the 
causes of which are to be inquired into. When, therefore, 
this philosophy applied itself to the consideration of the 
phenomena of motion, it pronounced the whole antecedent 
system factitious and foreign to its objects, and commencing 
their investigation sagaciously and diligently anew, it dis- 
covered the real and simple laws regulating the various series 
of these events.^ 

^ Etiam quum de causis motuum aliqiiid signiticare volant, atque divisionem 
ex illis iustituere, difl'eientiain motus natiu'alis et violent!, maxima cum 



OF SCIENCE VERSUS SYSTEM-BUILDING 333 

To which of those opposite sects does Adam Smith belong ? 
and on which of these two modes are the principles guiding 
his speculations framed ? 

To me it appears that his philosophy is that of explanation 
and system, and that his speculations are not to be considered 
as inductive investigations and expositions of the real prin- 
ciples guiding the successions of phenomena, but as successful 
efforts to arrange with regularity, according to common and 
preconceived notions, a multiplicity of known facts. 

My reasons for this opinion are drawn, 1st. from the object 
at which his philosophy aims : 2d. from the methods which he 
adopts to attain it : 3d. from the consequences which have 
resulted from his labors. I shall arrange the proofs for the 
justice of this conclusion, which I purpose submitting to 
the reader, according to these three heads ; contrasting in 
each the spirit and consequences of his speculative principles 
with those of the inductive philosophy. 

I. According to Adam Smith " Wonder, and not any expec- 
tation of advantage from its discoveries, is the first principle 
which prompts mankind to the study of philosophy, of that 
science which 'pretends to lay open the concealed connexions 
that unite the various appearances of nature ; ^ — philosophical 
systems are to be considered as mere inventions of the imagina- 
tion to connect together the otherwise disjointed and discordant 
phenomena of nature." — " A philosophical system is an imagi- 
nary machine invented to connect together in the fancy, those 
different movements and effects, which are already in reality 
performed." ^ 

socordia, introducunt ; quje et ipsa omnino ex notione vulgari est; cum omnis 
motus violentus etiam naturalis revera sit, — ista mere popularia sunt, et nullo 
modo in Naturam penetrant. Nov. Org. Lib. I. Ixvi. 

^ Atd TO Oav/j.d^€t.v ol d.vdpwiroL /cat vvv ko.I to irpixiTOv ripiavTo (piKo<jo<pelv, etc. 
Arist. Lib. I. Cap. 2. Metaph. 

"These passages are quoted from one of his posthumous works: "The 
Principles which lead and direct Philosophical Inquiries, illustrated by the 
History of Astronomy, of Ancient Physics, Logic, and Metaphysics." It may 
perhaps l)e thought that in this work he represents only what he conceives to 
be the actual path of philosophy, not that which it should pursue. I do not 
think so, because the declarations of his particular friends intimate the con- 
trary ; thus his editors say, in reference to the fragment on Astronomy, that it 



334 APPENDIX 

It is needless to say that this account of the object of 
philosophy is quite opposite to that given in the Novum 
Organum. The passages already quoted may show this and 
many others might be adduced. It is throughout the endeavor 
of the founder of the experimental philosophy to hold out 
truth itself, and the benefits to be derived from it, as its 
object ; to show that this we can never reach by any effort of 
the mere reasoning and imaginative faculties, or in any other 
manner than through patient induction ; ^ and that that 
framing of systems explanatory of things already known is 
foreign to its purposes." 

II. Philosophy being thus, according to Adam Smith, an art 
addressing itself to please the imagination, it gains its end by 
searching for some common and familiar observation, and 
making it serve as the means of connecting any series of 
interesting events, to the consideration of which curiosity may 
direct the attention. " In the mean time it will serve to con- 
firm what has gone before and to throw light upon what is to 
come after, that we observe, in general, that no system, how 
well soever in other respects supported, has even been able to 
gain any general credit on the world, whose connecting prin- 
ciples were not such as were familiar to all mankind." ^ It is 
by this circumstance that he judges of the merit of all philo- 
sophical systems, and the superiority of Sir Isaac Newton over 
Des Cartes, consists, according to him, in his discovering that 

is to be viewed as an additional illustration of those principles of the human 
mind, which Mr. Smith has pointed out to be the universal motives of philo- 
sophical researches. Dugald Stewart, also, in his life and introductory disser- 
tation intimates the same thing. The best proof, however, is in the course he 
actually himself pursued. 

^ Etenim verum examplar mundi in intellectu humano fundamus ; quale 
invenitur, non quale cuipiam sua propria ratio dicta verat. — Itaque ipsissimaj 
res sunt (in hoc genere) Veritas et utilitas. Nov. Org. Lib. I. cxxiv. 

^ Rursus, si alius quispiam fortasse veritatis inquisitor sit severior, tameu 
et ille ipse talem sibi proponet veritatis conditionem, qua? menti, et intellectui 
satisfaciat in redditioue causarum, rerum qua? jampridem sunt cognitte ; non 
earn quie nova operum pignora, et novam axiomatum lucem assequatur. Itaque 
si finis scientiarum a nemine adhuc bene positus sit, non mirum est, si in iis, 
quae sunt subordinata ad tinem, sequatur aberratio. Xov. Org. 

^ History of A stronomy. 



OF SCIENCE VERSUS SYSTEM-BUILDING 335 

he could join together the movements of the planets by so 
familiar a principle of connexion as that of gravity, which com- 
pletely removed all the difficulties the imagination had hitherto 
felt in attending to them.^ 

No doctrine, certainly, can be more opposed to the spirit of 
the philosophy of Bacon than this. It is this propensity to 
generalize immediately from a few familiar notions, that he all 
along represents as the vice of the antecedent system-builders, 
and the error which his followers have to guard against. 
" There have been, and can be," he says, " but two modes of 
searching after truth. The one commencing the chain of 
reasoning with some familiar conception of things, flies from 
them immediately to general axioms, and from these, and their 
assumed incontrovertible truths, judges of all particulars. A 
way of philosophizing brief, but rash ; easy and well fitted to 
conduct to disputes, but not leading to a knowledge of nature. 
This is the common mode. The other rises gradually and 
slowly from fact to fact and only at last arrives at the most 
general conclusions. These, however, are not notions, the pro- 
ducts of the imagination, but real laws of nature, and such as 
she herself will acknowledge and obey.^ Of the two, the 
former, the explanation of things according to preconceived 
notions, much more easily gains assent than the latter ; its 
principles collected from a few facts, and these of familiar 
occurrence, seize on the judgment, and fill the imagination. 
Whereas, on the other hand, a real interpretation of nature 
must find its materials in things very various in themselves, 
and gathered together from different quarters, cannot make a 

^History of Astronomy. Pessimum enim omnium est augurium quod ex 
consensu capitur in rebus intellectualibus. Nihil enim multis placet, nisi 
imaginationem feriat, aut intellectum vulgarium notionum nodis astringat, ut 
supra dictum est. Nov. Org. Lib. I. Ixxvii. 

^ "a sensu et particularibus primo loco ad maxima generalia advoletur, 

tanquam ad polos fixos circa quas desputationes vertantur ; ab illis caetera per 
media deriventur ; via certe compendiaria, sed prsecipiti ; et ad Naturam im- 
pervia, ad disputationes vero proclivi et accommodata. At secundum nos, 
axiomata continenter, et gradatim excitantur, ut nonnisi postremo loco ad 
generalissima veniatur ; ea vero generalissima evadunt, non notionalia, sed 
bene terminata ; et talia quae Natura ut revera sibi notiora agnoscat, quodque 
rebus hsereant in medullis." A^ov. Org. Praef. et lib. I. xviii. xix. 



836 APPENDIX 

forcible impression on the mind, and must necessarily appear to 
it as something harsh, unusual, and mysterious. Hence in all 
chains of reasoning, having for their object not to gain a know- 
ledge of nature, but to direct the opinions of men, the mode of 
philosophizing which proceeds by arguing from preconceived 
notions, will always be the most successful." ^ 

I believe it will be found, that the practice of the author of 
the Wealth of Nations, every where agrees with his theory, and 
that he has himself, in all his speculations, adopted the expla- 
natory and systematizing form of philosophizing, instead of the 
scientific and inductive, conforming himself to those principles 
which he has pointed out as leading and directing philosophical 
inquiry, and according to the accuracy of their agreement with 
which, all systems of nature have constantly, he tells us, 
" failed or succeeded in gaining reputation and renown to their 
authors " ; and that, his object being every where to build 
common facts and familiar observations into a system, not to 
inquire into the causes or real laws from which they spring, 
he takes those things for fundamental principles which would 
present themselves to the inductive inquirer as phenomena, the 
principles of which his manner of philosophizing would call on 
him to investigate. 

In the catalogue of our author's works, the Theory of Moral 
Sentiments ranks next to the Inquiry into the Nature and 
Causes of the Wealth of Nations. On what is it founded ? 
A generalization from what is termed sympathy — a principle 
than which there is perhaps no one more sensible to every 
individual, more capable of serving as a familiar bond of con- 
nexion between the phenomena of the moral world, or better 
fitted therefore, for the purposes of the systematic philosopher ; 
but than which, also, there is, probably, no single circumstance 
in the combined actions of the mind and body, that would 

' Quin longe validiores sunt ad subeundum assensum anficipationes, qiiam 
interpretationes ; quia ex paucis collectae, iisque maxime quse familiariter 
occurrunt, intellectum statim perstringunt, et phantasiam implent ; ubi contra, 
interpretationes, ex rebus admodum variis et multum distantibus sparsim 
collectae, intellectum subito percutere non possunt ; ut necesse sit eas, quoad 
opiniones, duras et absonas, fere instar mysteriorum fidei videri. In scientiis, 
quae in opinionibus et placitis fundatse sunt, bonus est usus auticipationum et 
dialecticae ; quando opus est assensum subjugare, non res. Xov. Org. Lib. I. xxviii. 



OF SCIENCE VERSUS SYSTEM-BUILDING 337 

appear to the inductive philosopher more deserving of being 
itself investigated. 

A person enters for the first time an hospital, and the 
spectacle is presented to him of an individual undergoing a 
severe operation. As at each cut of the knife he sees the 
flesh divided, the muscles, vessels, and nerves exposed, the 
blood flowing from the large, gaping, quivering wound, and as 
he hears the stifled groans of the sufferer, he is conscious of a 
strange, tremulous sensation, stealing rapidly over his frame, a 
cold dew stands on his forehead, his features contract, he 
breathes with difficulty, his limbs sink under him ; — in fact, he 
will be found to be in the very same state with the person 
operated on, in all respects, but that he feels not the acuteness 
of torturing pain, and is not subject to the quickening reaction 
produced by it. The vital powers therefore very possibly yield 
for a little, he faints, is carried out to the fresh air, and in a 
few minutes walks off astonished at the strangeness of the 
occurrence. When he reaches his home, he learns that an 
intimate friend has suffered a great calamity, and the intelli- 
gence deeply afflicts him. In both cases he suffers, or 
sympathizes, with another person. But are the two pre- 
cisely alike ? are we warranted to assume, with Adam Smith, 
that the laws governing them are the same ? and is there not 
a singular blending in both of mental and corporeal phenomena, 
all the circumstances of the actions and reactions of which are 
deserving of the minutest investigation from one, who would set 
about an inductive inquiry into the principles of our compound 
nature ? 

The picture, which, adopting the common notion of sympathy 
as the point of view, he has given of the phenomena of the 
moral world, is exceedingly interesting and comprehensive, and 
as a system regularly arranging a vast mass of facts, is very 
valuable. Here, however, its merits cease. No one, I 
apprehend, will now cite it, as truly developing the nature 
of our intellectual being, as an addition to the science of 
mind.^ 

Similar observations will apply to his fragments on the 

^ See the account given of it by his admirer and disciple, Sir James Mac- 
intosh in his Ethical Systems. 

Y 



338 APPENDIX 

imitative arts. He adopts in them the hypothesis that the 
pleasure they give arises from some difficulty in the execu- 
tion being overcome, and it seems to have been his intention to 
build up a whole system of art on this principle. Perhaps no 
circumstance can be found, running more through all the arts, 
and, therefore, better fitted for the connecting purposes of the 
system-builder, or, on the other hand, more curious in itself, 
and which, therefore, the inductive philosopher would be more 
inclined to inquire into. How is it, that the images of the 
poet come upon us with most force, when he puts his words 
into measured cadence ? How is it that an ideal form, if 
struck out of marble, affects us so much more than if moulded 
in wax ? Is it that the spirit, when fully roused, and striving 
to embody some great sentiment, or strong emotion, naturally 
seizes on the materials which may best betoken energy, and 
thus contrives to give an additional air of intellectuality to 
mere matter ? — This, or a series of such questions present them- 
selves to the inductive inquirer. What to the systematic 
philosopher affords the means of explaining other things, is to 
him the subject itself of inquiry. 

But, of all his speculations, there is none in which he seems 
to be more completely the philosopher of system and explana- 
tion than in the Wealth of Nations. It is a system entirely 
founded on the most common and familiar notions, and pro- 
ceeds altogether on the generalization of them. Value, riches, 
stock, capital, wealth, profit, self-interest, [competition], the desire 
of bettering one's condition, are evidently of this sort. They 
are manifestly terms of ill-defined import, referring to notions 
drawn hastily, and confusedly, from the course of passing 
events ; " notiones confusoe, et temere a rebus abstractse." And 
the strain of his reasoning upon them is that proper to the 
philosophy of system, which, taking from experience the most 
common and familiar observations, applies itself not to inquire 
into them, but to form a theory out of them. " Rationale enim 
genus philosophantium ex experientia arripiunt varia et vulgaria, 
eaque neque certo comperta, nee diligenter examinata et pensi- 
tata ; reliqua meditatione, atque ingenii agitatione ponunt." 
If we, therefore, view his work as an attempt to establish the 
science of wealth, on the principles of the experimental or 



OF SCIENCE VERSUS SYSTEM-BUILDING 339 

inductive philosophy, it is exposed to the censure of trangress- 
ing every rule of that philosophy. 

" Men are inclined to think that it is not necessary to 
inquire into the causes of events that are common and happen 
every day, but, taking them for things too evident and mani- 
fest to require explanation, assume them as causes sufficiently 
accounting for phenomena, that are not of so frequent and 
familiar occurrence. Whereas, in reality, no judgment can be 
formed of events which are rare and remarkable, nor can any 
thing new be brought to light, without an accurate investiga- 
tion of the causes, and even the causes of the causes of things, 
that are the most common and familiar." ^ 

The reason of this will be evident, by referring to the 
example before adduced. If a man, as in the case of the savage,, 
who is totally unacquainted with the system of things but as 
they present themselves to the eye of the practical observer, be 
asked why a stone falls to the ground, he would answer, " it is 
its nature, all heavy bodies fall to the ground." " Why does^ 
smoke ascend ? " " It is its nature, all light bodies mount 
upwards." " Why, when a stone is seen flying through the 
air, do you look about to find out the reason of it ? " " Be- 
cause it is against its nature, and I know, therefore, it must 

^ Atque de istis rebus, quae videntur vulgatge, illud homines cogitent ;; 
solere sane eos adhuc nihil aliud agere, quam ut eorum, quae rara sunt, 
causas ad ea, quae frequenter fiunt, referant et accommodent : at ipsorum,, 
quae frequentur eveniunt, causas nullas inquirant, sed ea ipsa recipiant tan- 
quam concessa et admissa. 

Itaque non ponderis, non rotationis ccelestium, non caloris non frigoris 
non luminis, non duri non mollis, non tenuis, non densi, non liquidi, non 
consistentis, non animati, non inanamiti, non similaris, non dissimilaris, 
nee demum organici causas quaerunt ; sed illis tanquam pro evidentibus et 
manifestis receptis, de cseteris rebus, qute non tam frequenter et familiariter 
occurrunt, disputant et judicant. 

Nos vero, qui satis scimus nullum de rebus raris aut notabilibus judicium 
fieri posse, multo minus res novas iii lucem protrahi, absque vulgarium 
rerum causis et causarum causis rite examinatis et repertis ; necessario ad 
res vulgarissimas in historiam nostram recipiendas compellimur. Quinetiam 
nil magis philosophise offecisse deprehendimus, quam quod res, quae familiares 
sunt et frequenter occurrunt, contemplationem hominum non morentur et 
detineant, sed recepiantur obiter neque earum causae quteri soleant ; ut non 
saepius requiratur informatio de rebus ignotis, quam attentio in notis. Nov^ 
Org., I, cxix. 



340 APPENDIX 

have been produced by violence — by some external force." 
Thus, too, among mere practical observers of events, there 
would come to be the terms gravity, levity, natural and violent 
motion. Now all these words and phrases, if correctly inter- 
preted, are perfectly correct, according to the measure of the 
knowledge of the individuals, and assume nothing but what 
their experience warrants. When it is said that smoke ascends 
in consequence of its levity, or because it is the nature of it 
and other light bodies to ascend, nothing more is necessarily 
implied in the words than that there is something, — what is not 
known, — arising from the general constitution of things, from 
the system of nature itself, causing that ascent, and that, while 
this general constitution of things remains unaltered, all such 
bodies will ascend. So it is when it is said that it is against 
the nature of a stone to move in any direction but downwards, 
and that its other motions must be violent. The expressions, 
in strictness, mean nothing more than that unless acted on by 
some extraneous cause, while the present condition of things 
lasts, if it move at all, its motion will be directly downwards. 
A.11 these are conclusions drawn from experience, and form 
•general rules of real practical utility. Science will never teach 
the savage to shape, to trim, or to preserve the poise of his 
canoe, better than observations similar to these have already 
taught him. 

When now the systematic philosopher applies himself to 
account for, and range in regular order, the various phenomena 
referable to matter and motion, his object being merely expla- 
nation and arrangement, he naturally sets out from common 
and familiar notions, and principles which no one doubts of, 
and applies all his powers to tracing out from their operation 
some explanation of the phenomena in question. " Eeasoning 
on these familiar notions, from a few particulars, and perhaps 
some generally admitted maxims, he rises immediately to the 
most general conclusions, and from their fixed and immutable 
truth judges all other particulars. If some of them seem con- 
trary to his theory, he employs his ingenuity to explain them 
away, or to make them appear coincident, or removes the diffi- 
culty by terming them exceptions ; while such particulars as 
are not opposed to his principles, are laboriously and artfully 



OF SCIENCE VERSUS SYSTEM-BUILDING 341 

arranged, according to his system." ^ Omitting, for the pre- 
sent, the consideration of what he actually accomplishes, let us 
attend to that wherein he fails. 

The familiar notions of the common observer become his 
connecting media, and he pretends to account for the whole 
phenomena of matter and motion, on the principles, as he calls 
them, of gravity, levity, natural and violent motion. Now it is 
obvious that, by this application of the terms, he completely, 
though imperceptibly, changes their meaning. As employed 
by the man of practical observation, though perhaps somewhat 
confusedly conceived, they necessarily and really mean nothing 
more, than certain known consequences, the results of some 
unknown laws or powers regulating the system of things. As 
employed by the systematic philosopher, they, on the contrary, 
are assumed to be the very laws, powers, or principles, them- 
selves governing and sustaining the mundane system. The 
change in signification is not perceived, for the generality of 
mankind are incapable of any thing like metaphysical accuracy 
of conception, and are led away very easily by the fallacies of 
language. Its consequences, however, are important, for if we 
understand by science the knowledge of the real laws of nature, 
— the laws governing the general system, — this assumption com- 
pletely diverts from their discovery, for it induces the belief 
that they are already reached. It seems to be on this account, 
that Lord Bacon so often points out the errors arising from the 
hasty adoption of preconceived notions, " anticipationes," the 
greater part of the first book of the Novum Organum consisting, 

^ Formam enim inquirendi et inveniendi apud antiques et ipsi profitentur, 
et scripta eorum prae se ferunt. Ea autem non alia fait, quam ut ab exemplis 
quibusdam et particularibus (additis notionibus communibus, et fortasse por- 
tioiie DonnuUa ex opinionibus receptis, quae maxime placuerunt) ad conclu- 
siones maxime generales sive principia scientiarum, advolarent ; ad quorum 
veritatem immotam et fixam conclusiones inferiores per media educerent 
ac probarent, ex quibus artem constituebant. Tum demum si nova particularia 
et exempla mota essent et adducta, quae placitis suis refragarentur; ilia aut 
per distinctiones, aut per regularum suarum explanationes, in ordinem sub- 
tiliter redigebant ; aut demum per exceptiones grosso mode summovebant. 
At rerum particularium non refragrantium causas, ad ilia principia sua 
laboriose et pertinaciter accommodabant. Varum nee historia naturalis et 
experientia ilia erat, quam fuisse oportebat (longe certe abest ;) et ista advo- 
latio ad generalissima omnia perdidit. Nov. Org. L. I. cxxv. 



342 APPENDIX 

in fact, of an exposition of them,^ Acuteness of reasoning, 
and reach of thought are thus, he observes, rendered useless, 
for they come too late. The place for them is examiniug and 
weighing experiences, and from these deducing first principles.^ 
If this be omitted no subtilty of definition, or logical accuracy 
of deduction can avail. The remedy is too weak for the evil, 
nor is itself void of evil. The instrument employed is not 
fitted to reach the depths of nature, and, by catching after 
what it can attain to, is rather calculated to establish error, 
than to open up the road to truth. The definitions may indeed 
sufficiently mark the sense, and from these definitions the con- 
clusions insisted on may be logically deduced; nevertheless there 
is this of deceit in the procedure, that the notions themselves 
may be taken up hastily, and carelessly from common observa- 
tion, and may, therefore, be confused, and loose, and afford no 
solid foundation for the edifice which it is attempted to rear." ^ 
.Such was the system of physics which the Greeks raised from 
these principles. Being built on common and familiar notions — 
a conversion of general practical rules into speculative general 
principles — whatever its merits were as a system, explaining 
according to popular notions, the various phenomena of nature, 
and ranging these in regular order, it had no pretensions to 
merit as expository of the real science of nature. 

It was not until attention was directed to the examination 
of things before supposed to be known, — motion, natural and 
violent, gravity, levity, etc. — and inquiry made into the prin- 

^ " Non, si omnia omnium astatum ingeuia coierint, et labores contulerint 
et transmiserint, progiessus magnus fieri poterit in scientiis per anticipa- 
tiones : quia errores radicales, et in prima digestione mentis ab excellentia 
functionum et remediorum seqiientium non curautur." Nov. Org. Lib. I. xxx. 

^Ibid. c. xxi. 

•* " Verum infirmior omnino est male medicina ; {Ars dialectica scilicet) 
nee ipsa mali expers — naturae enim subtilitatem longo intervallo non attingit ; 
et prensando quod non capit, ad errores potius stabiliendos, et quasi figendos, 
quam ad viam veritati aperiendam valuit— hoc subest fraudis, quod syllogis- 
nius ex propositionibus constet, propositiones ex verbis, verba autem notioaum 
tesserse et signa sint. Itaque si notiones ipsaj mentis (quie verborum quasi 
anima sunt, et totius hujusmodi structural ac fabriciB basis) male ac temere 
a rebus abstractte, et vagai, nee satis definitte et circumscriptte, denique 
multis modis vitiosie fuerint, omnia ruunt." Nov. Org. Prief. 



OF SCIENCE VERSUS SYSTEM-BUILDING 343 

ciples by which they themselves are regulated, the laws, that is 
to say, according to which the phenomena, so denominated, are 
produced, that a beginning was given to real science. Then 
the laws regulating the universal system were gradually 
unfolded, and things seemingly forever hidden in the depths of 
the immensity of space and time, brought clearly before the 
intellectual ken of man. 

As in the system of things making up the world of mere 
matter, certain terms are employed to denote general facts and 
rules, which [common] experience has taught, so, in the com- 
pound system of men and things making up the world of 
civilized life, certain other terms are employed to denote the 
general facts and rules, which [common] experience also has 
there taught ; and as in a department of the one, we have 
heaviness, lightness, natural, and violent motion, etc. ; so in a 
department of the other we have capital, value, profit, a due 
regard to self-interest, etc. ; in both, too, it is to be observed, 
such popular and familiar phrases and notions, correctly inter- 
preted, express, not the general laws of the system, but the 
usual and expected results of those laws. 

Thus, if in any particular society, one were to be asked, what 
the capital of some other person were, he might answer, " about 
a thousand pounds." If farther requested to state his reasons 
for saying so, he might reply, " the property he holds would 
fetch that in the market, he has been offered that for it," or, 
" I know it cost him that, and that he laid out his money 
judiciously." These are all the answers he would think of 
giving ; for common purposes they are all he requires to give, 
and they are all that his notions actually embrace. If asked 
again, " what revenue does this person derive from his 
capital ? " he might answer, " I suppose about that which such 
a capital generally yields, the usual profits of stock — a fair, 
reasonable, mercantile profit, neither much above or below par." 
If questioned farther, as to the nature of this capital, and its 
return, which he terms profit, he would answer, if simply a 
practical observer, " Eeally as to this I have never inquired, I 
know that where I have lived, and I believe in all civilized 
societies, certain things, if sold, have certain values, bring cer- 
tain sums of money, and if kept and judiciously employed, 



844 APPENDIX 

yield certain amounts of money, or moneys' worth. Why they 
do so, though it must arise, no doubt, from the circumstances 
and actions and reactions on each other of the various things 
and persons forming these societies, I have not examined into, 
and do not pretend to know." His answer, in short, would be 
that he knows them only as results of the laws governing the 
general system of which he makes a part. 

By taking, therefore, these, and such like common and 
familiar notions, as the foundation of his reasoning, Adam 
Smith made his work an explanatory system, not an inductive 
inquiry. The principles of the inductive philosophy would 
have led him to inquire into the nature of those familiar 
notions, — into the laws or causes of those common occurrences ; 
and he would have set out with the question, What is it, in 
the nature of man and matter, that makes any thing constitute 
a capital, or yield a profit ? In the words of the Novwni 
Organum, already cited, he would have considered, " that no 
judgment can ever be formed of things that are rare and 
remarkable, much less can any thing new be brought to light, 
unless the causes, and even the causes of the causes, of occur- 
rences the most common and familiar, be rigidly examined and 
clearly discovered." 

It is, therefore, an abuse of words to say, that the publica- 
tion of the Liquiry into the Wealth of Nations, rendered 
political economy a science of experience.^ It made it so in 
no other manner than as every philosophical system is, of 
necessity. They are all, of necessity, founded on some 
observations, the fruits of experience.^ The difference be- 

^ " Une science experimentale," Say. See note on Storch, p. 24, Vol. I. 
of the Cours d'Economie Politique, where he declares it to be precisely 
similar to modern mechanical science, " la mecanique analytique." The 
comparison should have been, as we have seen, with the ancient mechanical 
philosophy. 

^ " Neque illud quenquam moveat, quod in libris ejus (Aristotefis) de ani- 
malibus, et in problematibus, et in aliis suis tractatibus, versatio frequens sit 
in experimentis. Ille euim prius decreverat, neque experientiam ad consti- 
tuenda decreta et axiomata rite consiUuit ; sed postquam pro arbitrio suo de- 
crevisset, experientiam ad sua placita tortam circumducit, et captivam ; ut 
hoc etiam nomine magis accusandus sit, quam sectatores ejus moderni (scho- 
lasticorum philosophorum genus) qui experientiam omnino deseruerunt." 
A^ov. Org. ib. L. I. Ixiii. 



OF SCIENCE VERSUS SYSTEM-BUILDING 345 

tween them is, that those observations which men make 
concerning the general results of the laws of the universe, 
and to which convenience leads them to give names, are 
assumed by the systematic philosopher for the laws them- 
selves, and that the scientific inquirer examines them patiently, 
and perseveringly, and ascending gradually, from one thing to 
another, endeavors thus at last to reach the real laws of nature. 
While the one assumes phenomena for principles, the other 
applies to the things giving rise to those phenomena, and 
collecting, comparing, and arranging these, traces out the real 
connexions between them, the real principles governing nature. 

We may easily satisfy ourselves of the difference of the prin- 
ciples which true science reaches, and those employed in the 
Wealth of Nations, by taking any of the latter and seeing how 
it agrees with the rules by which the former may be tested. 
Thus the principle, that self-interest is the great and all-suffi- 
cient cause of the increase of wealth, both private and public, 
is evidently nothing else than an application of the common 
assumption that a man's fortune and his interest are the same, 
and a generalization of the observation that he, therefore, who 
understands his interest best and takes best care of it, will get 
rich the fastest. But if self-interest be, in the scientific sense, 
the cause of wealth, both public and private,^ (the law accord- 
ing to which it either is, or is not produced,) whenever self- 
interest, (the desire of bettering one's condition) manifests 
itself in action, it must tend to the increase of public wealth.^ 

Do the labors of the cool, calculating, gambler, or of the 
sharper, add to public wealth ? Does the spirit of keen bar- 
gaining, and taking every possible advantage of those with 
whom transfers are effected, that sometimes pervades classes, 
and communities, add to public wealth ? Assuredly not ; yet 
in all these self-interest is the ruling motive of action. Let it 
not be said, that these are exceptions to a general rule. 

^ D^sir de rhomme d'ameliorer son sort : principe qui est au monde moral, 
ce que la gravitation est au monde phisique. Storch. 

2 It will be observed that I here, and throughout, speak of self-interest in 
the common and familiar sense. The author of the Theory of Moral Senti- 
ments was not an utilitarian. If the reader happen to be so, he will perceive 
that the argument is not altered, the names only have to be so. 



S46 APPENDIX 

Though there may be exceptions to general rules, there are no 
exceptions to scientific principles. " Wherever a scientific 
cause, or law, or principle operates, there the thing itself, of 
which it is said to be the cause, is necessarily produced. And 
it may be universally affirmed that, where this the form is, 
there the thing sought is also, and where it is not, there the 
thing cannot be.^ Nothing is to be received for the true 
scientific cause, unless the thing of which it is the cause, 
increases and decreases along with it.'^ 

This difference, indeed, between common practical observa- 
tions and rules, and general scientific principles must always 
exist, for it springs from the different nature of the one and the 
other. The observations which the man of practice makes, as 
has been already remarked, are on phenomena, the results of 
the play of real principles, and as these principles may vary in 
their proportions to each other, and in the modes in which their 
powers are exerted, the results produced by their action must 
occasionally vary. The principles themselves, however, never 
vary ; and, therefore, one observation or experiment concerning 
a real principle, if there be no inaccuracy in it, has always in 
science been esteemed as good as a thousand. The whole 
inductive philosophy may, indeed, be said to rest on the 
impossibility of the occurrence of exceptions to real laws. 
Hence the extensive use of negative instances, determining, at 
last, what is a principle by pointing out what it is not. 

Again ; it is far from beinij the case, that a regard for self- 
interest, a desire of bettering one's condition, prompts always 
to a course of action leading to an increase of even private 
fortune. This must depend on what is esteemed the best 
condition, — on what one's happiness rests.^ Hence what has 

^ Etenim forma natura3 aliciijus talis est, ut ea posita, natura data infallibi- 
liter sequatur. Itaque adest perpetuo, quando natura ilia adest, atque earn 
universaliter affirmat, atque inest omni. Eadem forma talis est, ut ea amota, 
natura data infallibiliter fugiat. Itaque abest perpetuo, quando natura ilia 
abest, eamque perpetuo abnegat, atque inest soli. Nov. Org. Lib. II. iv. 

^Omnino sequitur ut non recipiatur aliqua natura pro vera forma, nisi per- 
petuo decrescat quando natura ipsa descrescit, et similiter perpetuo augeatur 
quando natura ipsa augetur. Now Org. Lib. II. xiii. 

^Le desir d'am^liorer son sort — le desir d'etre heureux. Storch, Vol. I. 
p. 44, 45. 



OF SCIENCE VERSUS SYSTEM-BUILDING 347 

"been regarded as the most enlightened self-interest/ has often 
led, as we have seen, to a course of action the very reverse. 
The Eomans, under the emperors, were assuredly as earnest in 
their quest after happiness, as were ever any race, yet their 
manners, and their whole practical morality tended to the 
diminution of wealth previously accumulated, and they 
swallowed up, in extravagant dissipation, the riches of king- 
doms. Nor let it be here answered, that facts applicable to 
the Eomans, or other people of habits and modes of thinking 
and acting unlike those characterizing the civilized world of 
modern days, cannot be fairly adduced in investigations con- 
cerning existing systems of society. This is indeed true, if the 
reasonings in the Wealth of Nations be admitted to be of the 
systematic and explanatory cast, but not if that work he main- 
tained to be an inductive inquiry. These remote and hetero- 
geneous instances, are the very ones which experimental science 
most prizes,^ and this, for the reason just adduced, that real 
principles being constant in their action, what are, and what 
are not the principles inquired after, are thus tested.^ 

^ [That is, the current self-interest of the educated classes, at any time or 
place; not the long-run, really "enlightened" self-interest, as tested by the 
experience of nations and of ages.] 

^ Nemo enim rei alicujus naturam in ipsa re, recte aut feliciter perscrutatur. 
Nov. Org. Praef. 

Instantias remotas et heterogeneas, per quas axiomata, tanquam igne, pro- 
bantur. Ibid. Lib. I. xlvii. 

^ Perhaps it may be said, that the strictness of the inductive method can 
only apply to the sciences treating of mere matter and its afifections. This 
were to declare the same thing to be, and not to be, a science of experiment, 
and is besides in opposition to the authority of the founder of the inductive 
philosophy. 

" Etiam dubitabit quispiam potius quara objiciet ; utrum nos de naturali 
tantum philosophia, an etiam de scientiis reliquis, logicis, ethicis, politicis, 
secundum viam nostram perficiendis loquamur. At nos certe de universis haec, 
quae dicta sunt, intelligimus : Atque quemadmodum vulgaris, logica, quse regit 
res per syllogismum, non tantum ad naturales, sed ad omnes scientias perti- 
net : ita et nostra, quai procedit per inductione'ni, omnia complectitur. Tam 
enim historiam et tabulas inveniendi conficimus de ira, metu, et verecundia, 
et similibus : ac etiam de exemplis rerum civilium ; nee minus de motibus 
mentalibus memorice, compositionis et divislontH, judlcii, et reliquorum, quam 
de ccdido et frigido, aut hice, aut vegetatione, aut similibus." Nov. Org. 
Lib. I. c. cxxvii. 



348 APPENDIX 

III. The actual history of what is termed the science of 
political economy, is another mode of ascertaining the justice 
of its pretensions to that appellation. By comparing it with 
the generic character of the history of philosophical sects of 
the explanatory and systematic form, given by the founder of 
the inductive philosophy, as contrasted with what he pointed 
out was to be expected from that philosophy, and time has 
shown it has accomplished, we might have farther grounds to 
come to a conclusion on the question. To do this at length, 
however, would lead us too far beyond limits, which I have 
already exceeded. I shall, therefore, confine the few farther 
observations I have to make, to one circumstance, which Lord 
Bacon gives as characteristic of the two sects. In his figura- 
tive language " the path which the inductive philosophy takes, 
is at first steep and difficult, but leads to an open country, 
while that adopted by the explanatory and systematic, though 
at first easy and inviting, is at last lost in deserts or conducts 
to precipices."^ 

The doubts and difficulties in which the progress of those 
has been involved, who have advanced farthest along the 
apparently safe and easy road that Adam Smith seemed to 
have opened up, indicate it not to be the path of science. Of 
these I shall adduce a few instances. 

Capital is uniformly treated of in the Wealth of Nations, as 
a thing homogeneous in its nature, having always the same 
qualities, (according to the definition of Mr. Say, an amount 
of values), and any increase or diminution of it, as a mere 
alteration in quantity. This being taken to be the case, as 
like causes produce like effects, it seems very evidently to 
follow, that the only manner in which a change can be pro- 
duced in the returns yielded by it [to the owner], must be by 
the labor that it employs, absorbing a larger or smaller part 
of them. This result is not uniformly kept in view in the 
Wealth of Nations, though it is very frequently brought for- 
ward.^ We are often told, that, as the wages of labor fall, 

1 — " Via altera ab initio ardua et difficilis, desinet in apertum ; altera 
primo intuitu expedita et proclivis, ducet in avia et prajcipitia." 

2 [" What is the nature of the profit of stock ? and how does it originate ? are 
questions the [real] answers to which do not immediately suggest themselves. 



OF SCIENCE VERSUS SYSTEM-BUILDING 349 

profits rise, and as profits fall the wages of labor rise, but 
other causes besides the proportion of its returns paid to the 
laborer, are conceived to operate on it. Thus a simple increase 
in its quantity is assigned, in one part of the work, as sufiicient 
of itself to occasion a fall in profits. "When the stocks of 
many rich merchants are turned into the same trade, their 
mutual competition naturally tends to lower its profit ; and 
when there is a like increase of stock in all the different trades 
■carried on in the same society, the same competition must pro- 
duce the same effect in them all." Mr. Kicardo has, however, 
pointed out, from Adam Smith's own principles, that no such 
effect would ensue, and insists on it as a general principle that 
wages alone vary profit. Profits, according to him, are in- 
creased or diminished, exactly as the maintenance of labor is 
€asy or difficult, from fertile land being abundant or scarce. 
Admitting the popular notion of capital, that serves as the 
basis of Adam Smith's reasonings, to be of a sort on which 
true science may be built, the theory of Mr. Eicardo seems to 
me hard to be controverted, and has certainly the merit of 
giving uniformity and regularity to the system. It has accord- 
ingly been acquiesced in very generally in Britain, by men 
who are given to this department of inquiry, and has been 
adopted and defended by many writers of unquestioned ability. 
Nevertheless, it may well be doubted, if it has added to the 
general confidence in the science. The conclusions to which 
it leads have in them something so extraordinary, as to 
exceed the strength of any common measure of faith in such 
abstractions. 

Thus, according to the principles of this school, no extension 
of foreign trade, however advantageous, and no improvement 
in domestic industry, however great, can in the least increase 
profits; [unless they cheapen food, and so multiply laborers, 
and so bring down money wages]. On the other hand, no 
diminution of foreign trade can, of itself, lessen profits. It 
follows also, from the same principles, that colonies give no 
commercial advantages to the mother country, and, therefore, 

, . . The author of the Wealth of Nations appears to consider the profit of 
stock, as paid out of and therefore derived from, the " value added by the 
Avorkman to the raw material." (Lauderdale, Inquiry, p. 149.)] 



350 APPENDIX 

that being in general expensive, they ought to be shaken off 
as a burden on her resources. Sir Henry Parnell observes, 
and quotes Mr. Mill in his support, that, " The capital which 
supplies commodities for the colonies would still prepare com- 
modities if the colonies ceased to purchase them ; and those 
commodities would find consumers, for every country contains 
within itself a market for all it can produce.^ There is, there- 
fore, no advantage derived under freedom of competition, from 
that part of the trade with a colony which consists in supply- 
ing it with goods, since no more is gained by it than such 
ordinary profits of stock as would be gained if no such trade 
existed."- 

These, and similar doctrines, have something in them so 
strange, so contrary to experience, and seem so paradoxical, 
that they have in most people rather the effect of exciting 
surprise, than producing belief. They are exceeded, however, 
by what a writer in the Edinburgh Revieio [McCulloch] has 
proved, and in my opinion satisfactorily proved, from the 
principles of his school, concerning the effect of Irish absen- 
teeism. He shows that it can have no disadvantageous, and 
possibly may have an advantageous effect, in that it can only 
cause capital to pass from one employment to another, possibly 
from a less, to a more advantageous employment. That, as it 
is the capital of the artisan, the tradesman, and shop-keeper, 
that yields them their revenue, were all their customers 
annihilated, they would still live equally well on their capitals. 
That so, were all the landlords in Ireland to leave it, and 
were their rents to be sent them, to a distant kingdom, in the 
shape either of cash or agricultural produce, it could not 
possibly be of any detriment to the country they abandoned. 

Though the argument is skilfully conducted, and though it 
is in perfect accordance with the leading principles of the 
science — for, if capitalists are dependent on their customers, 

^ [This last clause pertains to the theory of reciprocal demand, not to the 
theory of the general profit-yielding power of capital — two very different 
concepts.] 

-[If the colonies were "in the deep sea sunk," as Bentham put it. There 
was, indeed, in the colonial speculations of several writers of this period, a most 
extraordinary exemplitication of a lump-of-capital theory.] 



OF SCIENCE VERSUS SYSTEM-BUILDING 351 

what becomes of the all-sufficiency of capital ? — and, if the 
British Government could advantage Ireland by taxing 
absentees, what becomes of the principle of non-interference ? 
— yet there are perhaps few people, on whom it has had 
the effect the author probably desired. It has the disadvan- 
tage of proving too much. When it is shown, that, according 
to received principles, two large classes so intimately depen- 
dent on each other, as are the landlords of a great country, 
and the mechanics and capitalists that they employ, can be 
completely severed, without injuriously affecting the whole 
system of things in the society, we are rather inclined to 
doubt of the principles, than to acquiesce in the conclusion. 
However skilfully the argument may be urged, or however 
closely one part of it may seem joined to another, it has 
rather the effect of inducing skepticism than conviction. We 
still figure to ourselves that there is a loss to Ireland, a gain 
to some other place. We cannot get rid of the imagination, 
that, if the landlords were all to go in a body, for instance, to 
Brussels, and spend their rents there, they would give profit- 
able employment, in some way or other, to a vast number 
of laborers, tradesmen, and artificers, and that the population 
and wealth of that town would be largely augmented, that 
of Ireland proportionally diminished. 

These, and many such like instances, seem to us contrary 
to the usual progress of real knowledge. The experience of 
what true science is, has accustomed us to expect that in this, 
as in other branches of inquiry, the farther we advance the 
larger and larger a compass of undeniable facts should present 
themselves, that we should be able more and more evidently 
to connect phenomena, that seemed at first disjointed and 
isolated, and that, the indistinctness of distance being re- 
moved, truth should stand clearly before us. Deceived in our 
anticipations, we feel like travellers who find the straight and 
well-beaten path on which they entered, becoming more 
devious and faint the farther they journey, leaving the habita- 
tions of men, and leading to barren and dangerous wastes. 
Though we can trace no error, we begin to suspect that there 
is one, and that somehow or other, we have taken the wrong 
direction. 



352 APPENDIX 

Dugald Stewart has a remark on the abstract philosophy of 
David Hume, that seems not inapplicable to this, so termed, 
abstract science. It is well known, that that skeptical 
philosopher deduced, pretty clearly, from Mr. Locke's prin- 
ciples, that the human mind was a mere bundle of sensations. 
The professor observes, that, before any formal refutation of 
the doctrine appeared, it might have been sufficient answer to 
it, that it was so contrary to the experience of every one, 
as to make it more reasonable to suppose an error, either 
in the premises or deduction, though that error might not be 
discoverable, than to believe that the metaphysicians were 
right, all the rest of mankind wrong. Such an answer is, 
I suspect, that which is now present to the minds of very 
many, in regard to the strange dogmas of the prevailing school 
of political economy. They regard them as a sort of practical 
dcmonstratio ad absurdum of some fundamental fallacy in the 
science. 

Eeasoning from Adam Smith's principles, his followers, in 
more than one instance, have arrived at conclusions differing 
considerably from his. He looked on parsimony as the great 
generator of wealth ; they rather hold an opinion similar to 
that of Mandeville, that to consume largely is an essential 
part of the process, consumption and reproduction being 
represented by them as the two springs, by the rapid play 
of which the general prosperity is advanced.^ 

I shall conclude these remarks, by observing, that in my 
opinion the disciples and followers of Adam Smith, in claiming 
for the speculations contained in the Wealth of Nations, and 
for the doctrines they have founded on them, the rank of an 
experimental science, the conclusions of which are entitled to 
the same credence with other experimental sciences, act injudi- 
ciously, and by insisting on pretensions which are unfounded, 

^ [No English writer actually reproduces the teaching of Mandeville ; but 
certainly Malthus in his Political Economy represents exactly that progress is 
made by the " rapid play " on each other of supply and demand. 

The opinion respecting English classic economics which Rae still held thirty 
years later, is to be found in a fragment of his manuscript published in the 
Quarterly Journal of Economics for November, 1901.] 



OF SCIENCE VERSUS SYSTEM-BUILDING 353 

injure the cause of that philosopher and conceal his real merits. 
If we view his philosophical system of the Wealth of Nations, 
or indeed any of his philosophical systems, as he views every 
such system, "as an imaginary machine invented to connect 
together in the fancy those different movements and effects 
which are already in reality performed," nothing of the sort can 
be more beautiful. A clear, orderly, and extensive view is 
given of a vast number of interesting and important facts, 
connected by a few familiar principles. A great body of 
knowledge is thus brought before the mind in a shape which it 
can readily grasp, and easily command. The object being not 
to discover, but to arrange and methodize, all the subordinate 
principles of the system are artfully bent so as to embrace the 
phenomena, and care is taken that the imagination be not 
shocked by a view of matters that shall seem irreconcilable to 
the aspect of affairs which the [mere] contemplation of the 
world of life itself presents. ISTor is it to be disputed that a 
general system of the sort, besides the pleasure and the 
advantage derived from it, is likely to be nearer the truth than 
speculations of the same nature, confined to particular parts. 

The case, however, is completely altered, when the loose and 
popular principles on which such a system proceeds, are 
adopted as demonstrative axioms, the discoveries of real science, 
and are carried out to their extreme consequences. Their 
original purpose is then altogether changed, and instead of 
serving to bring before the mind a collection of facts, they lead 
it farther and farther away from truth and reality, into the 
barren and wearisome regions of mere verbal abstractions. 



ARTICLE VI. 

THE THEORY OF POPULATION.i 

The laws of true inductive science are of universal application 
and admit not of exceptions. If even a single manifest excep- 
tion occurs it ought to invalidate the law. If, for instance, a 
new compound were found that obeyed not the chemical law 
of definite proportions, it would rightly occasion an uneasy 
feeling in the whole chemical world, and there would be 
no rest there till the apparent anomalj^ was explained. 
Considered in this way the laws of population as expounded 
by Malthus will be found to fail. His error arises from the 
fact that he assimilates man to the inferior animals. This 
was also the practice of the elder Mirabeau [who maintained 
that wherever there was subsistence, the human species would 
multiply " like rats in a barn."] 

Now the nature of the two is different ; and if you assume 
that two things of unlike nature obey the same laws, you are 
guilty of a rashness that almost infallibly vitiates your conclu- 
sions. The inferior animals are led by mere instinct, whereas 
man is guided by reason, by fancy, and by that changeful 
thing we call moral feeling. Moreover, man and the lower 
animals are different physically. With the latter the female 

^ [From Rae's manuscript written in the Sandwich Islands, with the excep- 
tion of the last three paragraphs which are taken from p. 323 of the Political 
Economy. 

Two rather more elaborate versions of Rae's final position on the subject of 
population have alread}^ been printed in the Economic Journal for March, 
1902.] 



OF POPULATION 355 

admits the male only when she is in a condition to conceive ; 
with man it is otherwise. There are still other important 
points of difference under this head which you will find set 
forth in the Memorabilia, where Socrates is enumerating the 
particulars of man's superiority. [But the more significant 
differences are not those which are solely or chiefly physical ; 
but those which are psychological and moral.] Man is the 
child of art, of phantasy, and of reason full of freaks. 

The rapid depopulation of these islands is, in itself, a 
curious circumstance, and highly interesting as connected 
with the probable fate of other rude nations, the mass of 
the earth in fact, if subjected to similar influences. [It is, 
moreover, a phenomenon which does not square with the 
Mirabeau-Malthusian doctrine.] Subsistence is easily pro- 
cured here, there being an abundance of vacant, fertile land, 
two hours daily labor on which would give every man ample 
support for a large family. Cattle, goats, and horses (the 
latter eaten by the natives and preferred to beef), have been 
added to the resources of former times. One would expect, 
therefore, on Malthusian principles, an increase of population 
instead of this fearful diminution. 

Vice is put down by Malthus as one of the checks to 
population ; and here it is true of recent years vice, in 
the form of drunkenness and licentiousness especially among 
young females, has greatly increased. [But with Malthus 
vice is treated as specifically " a check " to the pressure of 
a growing population upon the means of subsistence, and 
arising out of that pressure. Here, as has just been observed, 
there is no pressure of population.] Those other forms of 
vice, and things analogous to vice, which are the positive 
checks of a growing population in straitened material circum- 
stances — wars, epidemics, human sacrifice, infanticide, incon- 
stant marriages, and intercourse between males (which last 
was formerly an established institution), have all since the 
coming of the missionaries been greatly lessened or done 
away with altogether. 

[The fact is that the Malthusian philosophy of population 
accounts for the vital phenomena of healthy societies only, 
not at all for that of sick societies, such as the one in these 



356 APPENDIX 

islands has become (notwithstanding the efforts of the mis- 
sionaries)/ and such as Rome was in the days of her decline. 

A scientific theory which does not explain the totality of 
the phenomena with which it is concerned, is manifestly in- 
sufficient ; at best, it may be half right.] 

A truly philosophical Essay on Population, fearlessly em- 
bracing the whole subject, might proceed thus. Man is an 
animal and more. Being an animal he must in each genera- 
tion exercise his powers of propagation to the extent of some- 
what more than reproducing himself, else accidents would 
diminish and ultimately destroy the race. He resembles the 
inferior animals also in this, that the act of propagation 
is attended with vehement pleasure. But he differs from 
them in this, that he knows the probable results of this act 
(which they do not), and in dread of these results may alto- 
gether refrain or take measures to negative them. He may 
employ the organs for mere pleasure or as a means of gratify- 
ing and confirming the affections. He has in short the capa- 
city of diminishing his numbers by abstinence which his 
reason, either when on the rig^ht road or when a wandering, 
may teach him ; or by other modes in which the appetite 
is abundantly gratified. For the reason that man is more 
than an animal, therefore, to increase, or to merely preserve, 
the numbers of any society, it is necessary that there exist an 
effective desire of offspring} 

This last in some respects coincides with the effective desire 
of accumulation, since if a man desire offspring he will 
generally effectively desire the means of supporting them 
[and advancing their position in the world]. But it is, never- 

' [See the article in the Economic Journal for the causes which Rae assigns 
for this social degeneration.] 

^ [The reader may be surprised at first sight that in this summary Rae makes 
no mention of man's need for food, seeing that in so far as he is an animal, 
that is a manifest requirement. The reason for the omission is that Rae is 
dealing here primarily with the specific principles of human propagation, not 
with their combination with other principles ("diminishing returns," "in- 
vention," and the like) which have to do with wealth production. In other 
words, throughout this Article he is concerned with setting forth not the com- 
plete doctrine of the actual multiplication of the human species, but with the 
pure theory of population itself.] 



OF POPULATION 357 

theless, regulated by different principles. These are mainly 
certain sentiments pervading the society, and which we may 
term instincts of Society. There is great difficulty in assign- 
ing a cause for these instincts, much the same as that we 
experience in accounting for the instincts proper of animals. 
We may rest on this without going farther, that in any parti- 
cular species of animal and in any particular society, they con- 
duce to their respective well-being in some particular phase of 
their existence.^ 

[But though in consequence of having been " hammered 
into the race," these social instincts respecting population 
are relatively permanent, they may, nevertheless, change. 
And thus it comes about that we tread on dangerous 
ground whenever we preach Malthusianism to any people.] 
The peculiar nature of the human mind, rather excited to 
action by motives, than passively operated on by them, and 
moulding, therefore, its energies to suit the course it adopts, 
occasions a difference between phenomena influenced by it 
and all others. Hence, according to the preponderating 
motive, and the course of action followed, the same powers 
and principles take opposite directions, and the will is able to 
draw to its purposes and make allies of those which would 
seem naturally opposed to it. 

Thus in an intelligent and moral community, the vanity of 
the mother is gratified in the well-being of the child, and she 
prides herself in the proofs of her having been an affectionate 
and careful parent. In a vain and dissipated community, on 
the other hand, she would be ashamed of devoting her atten- 
tion to the homely and unostentatious cares to which solicitude 
for the welfare of offspring prompts. In the one case vanity 
excites parental affection, in the other it stifles it. The move- 
ment of the mind, in these instances, is somewhat analogous to 
that of those balances, in which the poise, if in the least inclin- 
ing to one side or the other, hurries it down with a rapid and 
continually increasing preponderance. 

^ [Rae believed that the strenuous warfare ia which for many centuries the 
northern races of Europe were engaged, produced in them strong "instincts of 
society " respecting the desire for offspring and the sanctity of marriage, 
which still persist though threatened by modern conditions.] 



358 APPENDIX 

This proneness in humanity to advance or recede with 
a speed accelerated by the subjugation of opposing motives, 
helps to afford an explanation of what I conceive to be one 
of the main causes of the decay of states. 

[In the Article in the Economic Journal mentioned above, Rae goes more 
extensively, than in this brief outline, into the nature and causes of what he 
calls the "instincts of society" touching matters of marriage and procreation. 
He develops there at some length the idea that the effective desire of offspring 
depends not only upon individual psychology (as we ordinarily set bounds to 
that order of facts), but also upon a general hopeful, optimistic outlook on life 
pervading the whole social group. When a society gets on the downward 
road, and its members feel a sense of depression and lack of self-respect, men 
cease to breed. Under such conditions there is no agreement between material 
circumstances and the propagation of the species. The effective desire of 
offspring means, of course, not merely the desire to bring children into the 
world, but the taking satisfaction in them, and the desire to rear them to 
maturity. On these points, and generally on the whole subject of the theory 
of population, powerful support is afforded Rae by Bagehot in his Economic 
Studies. 

In one particular, it seems to the Editor, Rae is not altogether correct ; and 
that is in the position he takes here and elsewhere with respect to the relation 
between the principle of the effective desire of offspring and the principle of 
the effective desire of accumulation. They may be often opposed to each 
other. In a healthful society, indeed, for general sociological reasons, both 
will be strong ; and in a sick society, on the other hand, both will be weak. 
But in a society which is neither wholly well or wholly sick (as is the state of 
most societies), a strong effective desire of accumulation with many individuals, 
or with certain sections of the society, may go along with a weak effective 
desire of offspring, and vice versa. Rae seems to have been led into this 
position, involving some degree of error, through his disposition to over 
emphasize social solidarity for the purpose of getting strong contrasts, as 
wholes, between the different communities. 

But however this may be, it is certain that we cannot dogmatize for all 
times and places and classes in respect to population, in the Malthusian fashion. 
And it is also clear that in the principle of the effective desire of offspring we 
have the true centre of gravity, so to speak, of this complex and difficult 
subject, — the starting point for fresh and more fruitful studies.] 



ARTICLE VII. 

OF THE DOCTRINE OF LAISSEZ FAIRE, WITH SPECIAL 
REFERENCE TO THE OPERATIONS OF THE LEGISLATOR 
IN BRINGING THE ARTS OF FOREIGN COUNTRIES TO 
HIS OWN. 

When men unite in large societies, they cannot each take 
an active part in what concerns the common good. They 
are obliged to delegate their individual powers and rights 
to act, in things relating to it, to several, or to one. This 
body of men, or this man, acting and making laws for the 
supposed advantage of the whole, may properly be termed 
the legislator. It is, therefore, the capacities and powers of 
the whole, as far as they make one, turned to this sphere 
of action, and designated by this term, that we have now 
to consider. 

" Man is generally considered by statesmen and projectors, 
as the materials of a sort of political mechanics. Projectors 
disturb nature in the course of her operations on human 
affairs ; and it requires no more than to let her alone and 
give her fair play in the pursuit of her ends, that she may 
establish her own designs." " Little else is requisite to carry a 
state to the highest degree of opulence from the lowest bar- 
barism but peace, easy taxes, and a tolerable administration of 
justice ; all the rest being brought about by the natural course 
of things. All governments which thwart this natural course, 
which force things into another channel, or which endeavor to 
arrest the progress of society at a particular point, are un- 
natural, and to support themselves are obliged to be oppressive 
and tyrannical." ^ 

^ A ccGunt of the Life and Writings of Dr. Smith, by Dugald Stewart, p. 104. 



300 APPENDIX 

The principle [of economic politics] here set forth by Adam 
Smith, though not formally announced in the Wealth of 
Nations, runs, nevertheless, through the whole work, and in 
its particular application to this science, forms the most 
important of the conclusions to which his [purely economic] 
reasonings tend. It is very frequently, also, expressly 
brought forward by the supporters of his opinions, as an 
argument against the interference of the legislator, and of 
all those they employ, none perhaps, is more popular, or 
has had greater influence in giving currency to the system. 
A brief examination of its merit may not, then, form an 
improper introduction to the particular subject of this book. 

In strict philosophical accuracy, the whole of every political 
system is certainly natural. Every political system must be 
allowed to have proceeded from the operation through long ex- 
tended time, of the things without, and the things within man, 
acting as the powers and principles which nature has given 
them, cause them to act. Every such system has many parts, 
but they all belong to a great whole, and from their action 
and reaction on each other the movements of that whole pro- 
ceed. It seems not, therefore, to me, that we can take any of 
those parts separate from the others, and with propriety say, 
that it acts in opposition to the designs of nature, for that 
cannot well be said to be in opposition to the designs of 
nature, or to thwart her operations, which proceeds from prin- 
ciples that she herself has established. Least of all can states- 
men be taken separate from the rest of the frame of society, 
and the actions they generate considered as unnatural, or 
operating contrary to the order of things which nature has 
established, for, to speak in the general, they are all moulded 
after the form and character of their time and nation, and 
instead of giving laws to the age, must rather be regarded by 
the philosopher as emanations of its genius, and organs by 
which its voice is uttered. "Were the whole present race 
of politicians swept from the earth, so little essential difference 
would there be between them and their successors, that the 
change hence resulting to human afiairs could not, probably, 
be traced a century afterwards. Napoleon, when speaking on 
this subject to one of his generals, is somewhere reported 



OF LAISSEZ FAIRE 361 

to have expressed himself in nearly the following terms. 
" We are apt to think that we have done much more than 
we really have. It is the march of events that has made 
us, and makes us, what we are. Had you and I never 
existed, our places would have been held by others, and 
were we now to cease to exist, the blank would be so filled as 
not to be perceptible : " It must be allowed that this was 
with justice said of himself, even by such a man. Already 
we perceive that all the apparently mighty changes, refer- 
able to his personal agency, were rather undulations on the 
surface of the tide of human affairs, than alterations in its 
course.-^ 

When we speak of the course of the operations of nature on 
human affairs, philosophical accuracy would, I think, imply a 
reference to the whole course, and all the springs and prin- 
ciples, that actuate and guide it. These springs and principles, 
discordant and jarring as they may appear, may, nevertheless, 
have been so adjusted by the hand of nature, as to have a 
tendency gradually to bring the whole system nearer and 
nearer perfection and happiness, 

" From seeming evil still educing good, 
And better thence again, and better still, 
In infinite progression." 

This is a pleasing and no improbable theory, but, in this view 
of the subject, it is the tendency of the whole of these springs 
and principles that we have to consider, not some taken apart 
from others. Indeed, if we reason analogically, concerning 
the apparent action of these different springs and principles, so 
far from its appearing probable that the direct interference of 
the legislator in endeavoring to give an advantageous direc- 
tion to the course of the national industry, in its efforts 
after the production of wealth, is a principle unlikely to 
further that production, the presumption rather is, that it 
will farther it. 

To perceive this, it is necessary particularly to attend to 
the distinction which Adam Smith makes between nature and 
art as applied to the progress of human affairs. When we say, 

^ [These last statements seem to go badly with Rae's doctrine of invention.] 



362 APPENDIX 

a thing is produced by art, we mean, that it is the result of 
the agency of man, designedly directed to its production. 
When we say, a thing is produced by nature ; we mean 
that it is produced either without the agency of man, or, if by 
his agency, without its being his intention to produce that, 
which he, nevertheless, produces. Thus the fruit, which a tree 
cultivated with care in an orchard yields, is an artificial pro- 
duction, that yielded by another growing spontaneously in 
some wild, is a natural production. A path between two 
points marked out by rule and line is artificial. A footpath 
formed by the mere unconstrained passing of many people 
from one point to another, is natural, because, though equally 
with the former the work of man, it is not designedly formed 
by him. In this case it was his intention merely to pass from 
place to place, not to form a path by so passing. It is in this 
latter sense, that the production of national wealth is said to 
be the work of nature. It is said to be the intention of each 
individual in a nation, to advance merely his own wealth, and 
the tendency which the actions of all the individuals in a 
nation have to advance the sum of the national opulence, as it 
is said to make no part of their motives to action, is esteemed 
a work of nature, in the same manner as we may esteem 
a footpath, formed by the continual passing of people over 
some moor or heath, to be the work of nature. According to 
this view of the subject, it is the legislator alone, who can, of 
design, act with the view to advance the national opulence. It 
is held, however, that as this interference of the legislator dis- 
turbs the course which events would otherwise have taken, it 
acts in opposition to the course of nature, and, therefore, that 
the presumption is that it will be injurious. On the contrary, 
I hold, that a just analogy would rather lead us to infer that 
it will be beneficial. 

It must be acknowledged that when man acts most success- 
fully, it is thus that he does act. He never, indeed, seeks to 
conquer nature otherwise than by obeying her, but his aim, 
nevertheless, always is to conquer her. By observing the 
order of events, he acquires the power of changing that order. 
He does so, by that which distinguishes him from other 
animals, the reasoning faculty, which so directed we term art 



OF LAISSEZ FAIRE 363 

and without the aid of which so directed, we scarce attain 
any object. 

But though art and nature are thus put in opposition to 
each other, the form of expression is more popular than 
correct. Were the changes which man every where produces 
on the course of events, contrary to the designs of nature, we 
may rest satisfied that she would not have given him powers 
sufficient to effect them. What we call a conquering or 
governing of nature, is to be held, in a more enlarged and 
truer sense, an acting in obedience to her designs ; and man, 
as a reasoning animal is rather to be considered as an instru- 
ment in her hands, through which she effects much of that 
change in the order of events, and consequent progress from 
good to better, that we may fairly hope is going on, than 
as a separate agent acting in opposition to her. In this 
sense, all art may be said to be nature, as in another sense 
all nature may be said to be art.^ 

Is it then a thing to be assumed, a priori, as next to 
demonstrable, that art, the art of the legislator, cannot operate 
so as to advance the prosperity of nations ? That, of all 
the springs and principles actuating the movement of societies, 
it is the only one powerless to do good, or whose power can 
no otherwise be advantageously exerted than in checking its 
own propensity to act ? That though in every other depart- 
ment of human action it is called on to lead, yet here it must 
impose chains on itself and sit still ? That though every 
where else nature willingly submits herself to its government, 
nay, seems to court it, yet here she commands it to rest a 
mere spectator, beholding her " working out her own ends in 
her own way ? " 

The presumption, it seems to me, would rather be, that, 
though neither here nor elsewhere can man in wisdom oppose 

■'[In the words of Edmund Burke, — "Art is man's nature" ; or, as another 
has expressed it, — "man is the executive organ of nature." 

All this may be fully admitted and yet bring us no nearer the answer to 
the practical question, — how much beside maintaining simple law and order 
(setting up the "common Judge," in Locke's phrase) had the State in general 
better undertake to do ? This is mainly not a question of economics but of 
politics ; and it is not answered in the least by arguments drawn from 
analogy.] 



364 APPENDIX 

nature, yet here, as elsewhere, he is called on to direct her 
operations. That the result of a successful inquiry into the 
nature of wealth, would terminate in affording the means of 
exposing the errors that legislators had committed from not 
attending to all the circumstances connected with the growth 
of that wealth, whose progress it had been their aim to 
advance, and would so teach them, not that they ought to 
remain inactive, but how they may act safely, and advantage- 
ously ; and that thus, it would maintain the analogy running 
through the whole of man's connexion with the trains of events 
going on about him, the course of which he governs by ascer- 
taining exactly what it is. That here, as elsewhere, his advance 
in knowledge would show him his power, not his impotence. 

According to the view of the nature of stock, and of the 
causes generating and adding to it, which has been given in 
the preceding book, it would seem that its increase is 
advanced : 

I. By whatever promotes the general intelligence and 
morality of the society ; and that, consequently, the moral 
and intellectual education of the people makes an important 
element in its progress : 

II. By whatever promotes invention ; 

1. By advancing the progress of science and art within the 
community ; 

2. By the transfer from other communities of the sciences 
and arts there generated : 

III. By whatever prevents the dissipation in luxury, of any 
portion of the funds of the community. 

A full investigation of the modes in which the legislator 
may promote the increase of the stock of the community, 
would comprehend an examination of the manner in which 
he may operate in these several particulars, of the rules neces- 
sary for him to observe in each case, and an enumeration ot 
instances, in which, according as his efforts have been judici- 
ously or injudiciously exerted, he has succeeded or failed in 
his enterprises. 

When we examine the arts practised by the members of 
any of the numerous societies, among whom the surface of the 



OF LAISSEZ FAIRE 365 

earth is divided, we find that there are very few which have 
arisen among themselves.^ Unless in some rare instances, they 
have been all brought from abroad. Inventions appearing at 
various points in their rude elementary state, have gradually 
spread themselves far and wide, and, as they have spread, 
have improved. These passages from place to place, seem 
to have been generally brought about by violent causes — by 
wars, internal disturbances, and revolutions. But, as society 
assumes a more settled form, it is to be hoped that reason 
will rise superior to force, and that changes produced by 
violence will diminish ; that wars and tumults will become less 
frequent, or will altogether cease, and that thus a great portion 
of the evils which have afflicted humanity will be removed. 
But if the direct evils brought about by the reign of violence, 
be removed by the ascendency of reason over passion, must 
the indirect good also produced by it be abandoned ? or, is 
it not the place of the intellectual part of our nature, watching 
in this, as in other instances, the progress of events, so to 
influence that progress, as that the good may be brought to 
pass, the evil prevented ? 

The answer to these questions is, I conceive, too obvious to 
require a formal enunciation. If this be the case, it would 
not seem necessary to recommence a discussion concerning 
the apparent propriety of assistance being in many instances 
given by the legislator to the passage of the useful arts from 
country to country. This, as a general practical conclusion, 
must be granted. The question again resolves itself into par- 
ticulars, and the investigations of the political economist, 
would seem to be confined to the tracing out, from the 
principles of his science, rules determining when the passage of 
any art is practicable, and when the benefits derived from it 
will exceed, or fall short of the necessary expense of effecting 
the passage. It is not my intention to attempt a full discus- 
sion of these various particulars. It will be sufficient for the 
object in view, to enumerate the general advantages which such 
transfers produce, and to state some of the chief circumstances 
favorable, and some of the others adverse to their success. 

1 [See "The Transplantation of Arts and Institutions," Appendix to the 
second volume of Cunningham's Western Civilization.] 



366 APPENDIX 

When these measures are completely successful, that is, 
when the commodity, the product of the art in question, comes 
to be made at the same cost in the country to which its manu- 
facture is transferred, as in that from which it comes, or at 
less cost than there, the advantages which the community 
derives from them are various, but, as concerns commodities, 
not luxuries, may be reduced to three heads. 

1. The saving of the expense of transport of the foreign 
coumiodity. This, as is shown elsewhere, is often very 
great. It may be remarked, too, that some articles are so 
perishable, or so difficult of transport, that they cannot enter 
into the system of exchange of two societies. They are pro- 
duced, or may very easily be produced in the progress of the 
construction and exhaustion of other instruments, but from 
its being found very difficult or impracticable to transport 
them to places where they might be exchanged for valuable 
commodities, they want the whole, or a great part of the 
utility they would there possess. A farmer, for instance, in 
the interior of some great agricultural country, say North 
America, has almost always a large mass of commodities 
which are nearly, or altogether, valueless to him. Great part 
of the timber he cuts down he is obliged to burn up on the 
ground, and much of the produce of his orchard, of his dairy, 
and of his poultry yard and garden, is either entirely, or in a 
great measure, lost. Xo little part of the direct produce of 
the farm, is also lost. His working cattle are idle for weeks 
or months in the course of the year, and any superabundance 
of the more bulky articles, such as turnips, potatoes, oats, 
or hay, lies nearly useless on his hands. When a manu- 
facturing village is established in his neighbourhood, all such 
productions become valuable, and are transferred to the 
artisan, and master manufacturer, as returns for the products 
of their art. The pine of the forest goes to build their 
houses, the maple, the birch, and the walnut to make furni- 
ture for them, all potatoes and other vegetables of the sort, 
that can be spared, are consumed by them as articles of 
food, the working cattle ^et emploved at all times, and there 
are none of the returns of the industry of the agriculturist, 
but find a ready market. The advantao-es hence resulting!: 



OF LAISSEZ FAIRE 36r 

to the parts of the country where the new art fixes itself, 
may be estimated by observing the great rise in the value 
and rent of land which follows it. We have also a good 
measure of them, in the difference between these in the 
neighbourhood of manufacturing towns and villages, and in 
places distant from them. 

The direct effect, therefore, of these general and partial 
improvements, is to carry instruments, generally or partially 
throughout the community, to orders of quicker return, and so 
increase the absolute capital of the society.^ 

2. They have also a large indirect effect in carrying instru- 
ments to orders of quicker return, by stimulating invention, 
and diminishing the propensity to servile imitation. Every 
useful art is so connected with many, or with all others, that 
whatever renders its products more easily attainable, facilitates 
the operations of a whole circle of arts, and introduces change 
— the great agent in producing improvements — under the most 
favorable form. Thus the recent improvements in the iron 
manufacture, have in Great Britain had no inconsiderable share in 
effiecting the general improvement in the mechanical arts which 
has there taken place. Arts, too, as we have seen, when 
brought together pass into one another, and thus also improve- 
ments in old arts are produced, or new arts generated. Even 
their very existence in any society gives a powerful stimulus to 
the ingenuity of its members. This has been well noticed by 
Mr. Hamilton : " To cherish and invigorate the activity of the 
human mind, by multiplying the objects of enterprise, is not 
among the least considerable of the expedients by which the 
wealth of a nation may be promoted. Even things in them- 
selves not positively advantageous, sometimes become so, by their 
tendency to provoke exertion. Every new scene which is 
opened to the busy nature of man, to rouse and exert itself, is 
the addition of a new energy to the general stock of effort. 

^ [The foregoing seems to be the basis for an argument for " internal improve- 
ments " rather than for protection. Undoubtedly a community is held back 
economically by lack of "power of association," and this last depends chiefly 
on means of transportation. But so far as products of domestic agriculture 
cannot be exported by reason of excessive cost of transportation, this very cir- 
cumstance constitutes indirectly a natural protection for manufactures.] 



^68 APPENDIX 

" The spirit of enterprise, useful and prolific as it is, must 
necessarily be contracted or expanded in proportion to the 
simplicity or variety of the occupations and productions which 
are to be found in a society. It must be less in a nation of 
mere cultivators than in a nation of cultivators and merchants, 
less in a nation of cultivators and merchants, than in a nation 
of cultivators, artificers, and merchants." ^ 

3. The supply of any commodities which one society is in 
the habit of receiving from another and independent society, is 
liable to be suddenly interrupted by wars, or other causes. 
Hence arises [not infrequently] great waste of the resources of 
the community. In many cases the whole system of instru- 
ments it possesses is at once disjointed, and it is long before the 
society recovers from the shock. The deficiency is at last 
supplied, it may be in a more effective manner than before, 
but in the interim there is great waste. Communities depen- 
dent on others for the supply of commodities for which they 
cannot readily find substitutes, must [therefore] necessarily, 
every now and then, be subjected to great diminution of their 
funds from such causes. There are few extensive wars that 
do not furnish instances of it. It is probable that the absolute 
loss so caused to the present United States, from the interrup- 
tion of their intercourse with Great Britain, at the commencement 
of the war of the revolution, equalled the whole expense of that 
war. The loss which many of the continental nations experi- 
enced from the sudden interruption to the supply of British 
manufactures, during the progress of the war against Napoleon, 
was also excessive. Great Britain herself, on the same occasion, 
suffered very severely from being at once deprived of the supply 
of materials necessary to many branches of her industry. Thus 
the cutting off the supply of Baltic and Norwegian timber, was 
for some years very sensibly felt by her. 

It is no doubt true, that, on such occasions, the necessity 
which arises to procure substitutes for the commodities which 
are deficient, largely stimulating ingenuity, often ultimately 
produces real benefit. Wars and similar interruptions to inter- 
course, as has been repeatedly observed, are, in fact, one of the 
chief agents by which the arts have been made to pass from 

' Works, Vol. I. Report on Manufactures. 



OF LAISSEZ FAIRE 369 

country to country. But the same benefits might have been 
produced by the gradual operations of the legislator, without 
the sacrifice in this way required ; and it is the business of 
reason, watching events, to separate the good from the evil, and 
to search for plans of obtaining the one, and avoiding the 
other. 

But, while the legislator is called on to act, he is also called 
on to act cautiously, and to regulate his proceedings by an 
attentive consideration of the progress of events. He is never 
justifiable in attempting to transfer arts yielding utilities from 
foreign countries to his own, unless he have sufficient reason to 
conclude that they will ultimately lessen the cost of the com- 
modities they produce, or are of such a nature, that the risk of 
waste to the stock of the community, from a sudden interrup- 
tion to their importation from abroad, is sufficiently great to 
warrant the probable expense, both of the transfer and of 
maintaining the manufacture at home. It is his business first 
to ascertain these points, and to regulate his proceedings 
accordingly. 

When there are circumstances particularly unfavorable to the 
practice of the art, and no countervailing circumstances parti- 
cularly favorable to it, the first introduction of it must always 
cost the society high, and the subsequent maintaining of it will 
in all probability be a burden on the common industry and 
stock. Among unfavorable circumstances may be noted a 
strength of the effective desire of accumulation, less than that 
of a foreign country, and instruments consequently remaining at 
orders of quicker return. This is a circumstance lying beyond 
the reach of the legislator, and which he cannot hope to change. 
If then there are no other counteracting favorable circum- 
stances, the art cannot be transferred and preserved, but at 
great and continual expense. Examples of injudicious conduct 
of the legislator from inattention to this particular have been 
not unfrequent. As an instance, may be noted the attempts of 
Louis XIV to make France a maritime and commercial nation. 
To do so, it only required that the principle of accumulation 
should have existed in sufficient strength among the people of 
France, to carry them to the construction of instruments of the 
same orders as were formed in England, and other maritime 

2 a 



370 APPENDIX 

and commercial nations. The French at that time had ships 
and commerce, and had their accumulative principle been so 
strong as to lead them to construct instruments returning as 
slowly as those formed by the English and Dutch, their com- 
merce and navy would easily have rivaled those of these 
nations. The attempt of the British, in some instances, to 
supplant the Dutch in their fishery, was liable to a similar 
objection. 

Among circumstances particularly favorable to the transfer 
of a foreign art, may be noted the raw materials of the manu- 
facture existing within the territory of the society in abundance. 
The acquisition of the art in this case saves the expense of a 
double transport. On this account, the bringing the woollen 
manufacture to England was a very happy measure. 

Great strength of the accumulative principle, is also another 
particularly favorable circumstance. This rendered the efforts 
of the English in the beginning of last century, to acquire many 
foreign manufactures, prudent and successful. 

The legislator effects his purposes by premiums for success- 
ful individual imitations of the foreign article ; by general boun- 
ties on the home manufacture ; or by duties on that imported 
from abroad. Of these, premiums take so little out of the 
common funds, that their amount forms an item too small to 
enter into the calculation, in questions of national policy. 
They are useful as testing the practicability of the transfer. 
That having been done, it having been made sufficiently appa- 
rent that nothing prevents the branch of industry in question 
beinsj established, but the difficulties attending new under- 
takings, the want of skilled labor, and a sufficiently accurate 
knowledge of the properties of the materials to be employed in 
the formation of the new instruments, it is then proper to 
proceed to direct and general encouragements by bounties or 
duties. In this way real capital, and healthy enterprise are 
directed to the art, the difficulties attending its introduction 
overcome in the shortest possible space, and the commodities 
yielded by it are produced at less outlay, and afforded at a less 
price than that, at which they were before imported. 

It appears, therefore, that the legislator can effectively 



OF LAISSEZ FAIRE 371 

advance the general stock of a society, by effecting the passage 
of the useful arts from foreign countries to his own. 

To this position several objections may be made, of which 
some are founded on the nature of things, others arise almost 
entirely from the ambiguity of language. 

It may, probably, occur to the reader, that I have con- 
sidered the legislator as always endeavoring to act for the 
good of the society, and capable of understanding what is 
for its good, whereas, in reality, the individual or individuals 
in whom the legislative power is vested, very often neither 
understand what is for the general welfare, nor act so as 
to promote it. This objection carries us to the nature of laws 
and government, and can, therefore, be only very generally 
answered. 

I would observe, then, that though in other matters, as in 
projects of distant conquest, or in intrigues for changing the 
constitution, the legislator may act in opposition to the 
common interests, yet, speaking generally, in all his pro- 
ceedings relative to the wealth of the community, it is his- 
aim to act in accordance with them. In despotic govern- 
ments this is the case, because there the legislator looks 
on the wealth of the people as his own ; in free govern- 
ments because in them his interests are identified with theirs. 
It may be that he does not adopt judicious measures for the 
purpose, but if so, it is his judgment, not his will that is 
in fault. ^ 

Again, it must be granted that the perfection, or imperfec- 
tion of action of the power invested with legislative authority,, 
depends chiefly on the prevalence or defect, of intelligence and 
public spirit throughout the community. Every government 
rests on opinion. Whenever the majority are thoroughly con- 
vinced that they would derive advantages from a change in the 
constitution, or in the person or persons administering it, the 
time of a revolution approaches. It is only from the members 
of any society not perceiving what would be for their good, or 
not believing they can find among them men sufficiently 
honest or intelligent to execute what would promote it, that 
the legislative power can be greatly or permanently vicious or 

^[Compare Article I. p. 267.] 



372 APPENDIX 

defective. There is always a close connexion between the 
nature of the people and of the government. Despotism and 
anarchy imply a general debasement in the intellectual and 
moral powers ; freedom and order, an elevation of them. The 
more despotic the government the more dependent on the will 
or caprice of a single person, the more it is subject to error in 
all legislative measures. The more despotic the government, 
however, the less also the intelligence, and the greater the 
selfishness, and consequently the vanity of the governed. The 
less, also, the inventive power, and the advance in science and 
art, and the greater the addiction to luxury. But the less the 
comparative advance in science and art, and the greater the 
addiction to luxury, the greater facility is given to such opera- 
tions of the legislator as have for their aim to increase the 
wealth of the community. The farther any society is behind 
others in a knowledge of the useful arts, the greater the 
number of new arts that may be introduced ; the larger the 
amount of luxury that prevails in it, the greater the revenue 
that may be raised by taxation without interfering with indi- 
vidual income. Hence, speaking generally, if legislators in 
despotic governments, were other circumstances equal, would 
be more prone to go wrong ; they have there so great facility 
in acting, that they have greater chance to go right. 

A reference to examples will make this apparent. If, for 
an instance of one of the most ignorant and slavish of existing 
societies, we turn to some one of the islands of the South Sea, 
it will be allowed that a legislator of intelligence and persever- 
ance might there etiect much good by introducing among them 
the arts of men farther advanced in the career of improvement. 
Though we cannot expect to find such a legislator there, one 
would be inclined to augur favorably of the efiects likely to 
result from the unskilful efforts of even any of their barbarous 
chiefs, directed to so praiseworthy an object. AVe should not 
conceive he wasted the resources of his country, by turning 
part of the national funds to such purposes. Of extensive 
countries where unmitigated slavery and despotism prevail, 
Egypt is perhaps most under the eye of Europeans. It is not, 
however, commonly believed by them, that the projects of its 
present ruler for the introduction into it of modern science and 



OF LAISSEZ FA IRE y>T4 

art, are inconsistent with the dictateB of sound policy. Facts 
would demonstrate the fallacy of any such supposition. Errors, 
no doubt, may have been, and may be committed, but the good 
assuredly overl^alances the evil. The revolution wrought in 
liuHoia by I'eler' tlie Great, is another instance of the same 
sort. In such cases the power of the legislator to effect bene- 
ficial changes is so great, that even his most blundering efforts 
are seldom altogether successless. A fruitfial soil yields large 
returns, even to a very unskilful husbandman. If we pass 
froni them to governments, of which freedom, intelligence, and 
public spirit, are the moving powers, we find there, that though 
the capacity to produce good is diminished, the liability to 
error is also diminished. It were folly in the legislature of the 
United States, to imagine itself capable of giving an impulse so 
sudden and great, to the resources of the country, as that 
brought about in Egypt by the present Pacha, or in Russia by 
the first J'eier. it fias tfie advantage, however, of being much 
less liable to error. Every important measure there agitated, 
before it can be adopted, is su Injected to the scrutiny of great 
numbers of intelligent and well inioruied individuals, stimu- 
lated alike by their regard to tlieir country and to themselves, 
to trace out with accuracy its future operations and effects, 
liy this means the greatest security, of which the nature 
of human affairs admits, is given against the adoption of 
impolitic or liurtful schemes. With such cautions, the legis- 
lator may with prudence undertake a series of measures, 
that, under other circumstances, were of very doubtful 
expediency. 

In one sort of government, therefore, the facility of action 
gives warrant to act, and in another the probable freedom from 
error. In both it is the part of the legislator to act, but to act 
in conformity to the laws arising from the constitution which 
nature has given to man and to matter. In doing so instead 
of acting in opposition to nature, he fills his natural place in a 
system established by nature. In both, also, it is the part of 
the inquirer into the principles of politics, to endeavor to 
throw light along the path of the legislator, not vainly to 
attempt to persuade him, that an insuperable obstacle blocks 
it up. 



374 APPENDIX 

Finally, concerning this objection, it may be observed, that 
it refers to casual ills connected with what is in itself an 
acknowledged good, and is of a character altogether different 
from those springing from the doctrines of the followers of 
Adam Smith. They hold up legislative interference as neces- 
sarily and essentially evil. 

The second objection I have to note, as resulting from the 
nature of things themselves, is the possible evil effects of an 
excessive revenue accruing to the legislator, from protecting 
and encouraging the industry of the society and turning into 
his own coffers as much as possible of the amount otherwise 
dissipated in luxuries. A superabundant revenue in the hands 
of the legislator, though directly a great good, is sometimes, 
indirectly a great evil. It may enable him, without any 
expense to the society, to carry on projects that must otherwise 
have pressed heavily on its resources, but it also places an 
instrument of great power in his hands, and one which, in cer- 
tain circumstances, he may turn to very pernicious ends. It 
may have an effect similar to that which the discovery of the 
western continent produced on Spain. The direct effects of 
the riches that flowed in from the new world, were mightily to 
increase the power of the Spanish monarchy. Indirectly, how- 
ever, their effects were to corrupt the court and the nobles, and 
to spread wide, through the higher classes, a dissolute, and yet 
a mercenary spirit. The objection, however, only refers at all 
to countries where there are no public burdens to absorb the 
surplus public revenue. Is is, consequently, totally inappli- 
cable to Great Britain. It also chiefly refers to countries where 
there are no ethcient checks to abuses of the legislative or 
executive powers. This, too, it may be observed, is an objec- 
tion which, as far as I know, has not been urged by modern 
political economists. 

The objections, which have their foundation in the views of 
the subject presented by Adam Smith, and which are urged by 
his present followers, depend mainly on the nature of words, 
and the sophisms produced by a generalization from names 
instead of things — from preconceived notions which verbally, 
but not really, embrace the phenomena. Terms, and so, also, 
reasonings, fitly applied to the operations of individuals in the 



OF LAISSEZ FAIRE 375 

preservation, enjoyment, and increase of wealth, are transferred 
immediately to societies, and the [economic] rules and principles 
which hold good in the one, are assumed to be exactly appli- 
cable to the other. If what is thus taken for granted be 
admitted, farther discussion is unnecessary, for the truth of the 
proposition to be proved, is implied in the terms in which it is 
enunciated. It has been my aim, throughout the preceding 
pages, to expose the fallacy of these assumptions, and, conse- 
quently, of the arguments resting on them. 



[The position of the upholder of laissez /aire is precisely that "the 
nature of human affairs," respecting things political, does not admit of 
sufficient "security" against grave abuses in complicated business, un- 
necessarily undertaken by government. As an editorial writer has recently 
expressed it — "A great gulf is fixed between the theory and practice of 
civil govenament. Theoretically, the legislature expresses the will of the 
people. As a matter of fact the laws enacted have all sorts of origin. Most 
of them are carried through in the interest of a small number of persons." 
That this applies in a special degree to protection, even under the purest 
and most free governments, is due to the fact that "every important measure" 
of that sort "resolves itself into particulars" about which few people, except 
the interested beneficiaries, inform themselves and take action. But we have 
before us a broader question than that of protective tariffs alone. 

On both sides of this controversy of individualism versus collectivism (I 
have in mind now especially the opening paragraphs of this article), there is 
the fallacy of metaphor. " Nature " is personified by one side and represented 
as doing things. The idealized abstraction of the all- wise " legislator " (in 
recent literature called "the State") is set up on the other side. But 
it is in fact many men of many minds who do things, — ordinary men always 
possessing some knowledge and some good will, but also always prone to 
intellectual and moral error. The question is, by which general plan can 
society best get the work of the world done : is it by the relatively inflexible, 
preconceived, centralized methods of the governing power of organized civil 
society ; or by the comparatively flexible, spontaneous, decentralized methods 
of individuals and voluntary associations of individuals? Is it, in short, by 
the impatient plan of compulsory regimentation ; or by the slow-moving 
methodless method of freedom? 

' ' The inquirer into the principles of politics " has indeed the high office 
to throw such "light" as he may possess "along the path" of the many- 
headed legislator. It is his duty to say not pleasant things, but true things. 
Not at all in the spirit of a mere obstructionist, he may point out that certain 
specific "ills" connected with "legislative interference" along many lines, 
are not "casual" but permanent, and that they clearly outweigh the possible 
" acknowledged good " to be derived. And speaking generally, he may teach 



r>7G APPENDIX 

that no refined policy based on the theiM-y of eoiMiomists, is ever likely t.* 
l>e carried into practice under the conditions whicli obtain in government . 
Such a jx^licy. merging with other policies, is almost certivin to be com- 
pi\->mis<Hi completely out of shape. Only the private manager (with all his 
short-ci^mings) is eye-single to the economic, business-like execution of any 
piece of work. 

All this, and other tvspects; of this great subject, belong to »ui "order of 
fact* " with which Rae divs not seem to have been at all acquaint eil. Clearly. 
politics wa* his blind side. In these matters his great advei-Si\ry \*-as vasth 
his superior.] 



i 



ARTICLE VIII. 

OF THE SUPPOSED IDENTITY OF THE CAUSES GIVING 
EISE TO INDIVIDUAL AND NATIONAL WEALTH.i 

PART I.— WHEN ASSUMED AS A SELF-EVIDENT TRUTH. 
PART II.— WHEN DEDUCED FROM AN INGENIOUS THEORY. 

PART I. 

When wealth, considered in the general, is conceived to be a 
thing either so clear as to require no definition, or so simple as 
to be fully grasped by any definition, two different and oppos- 
ing systems naturally seem to arise concerning it. 

The wealth of all the individuals in a state being, it may be 
said, of necessity measured by the amount of the national 

^ [The title of Rae's first "Book" in the original edition was "Individual 
and National Interests are not Identical." The idea accords with his leading 
concept on the side of man's association with his fellow men, which is that 
the sociological principle of the "social and benevolent affections" takes 
precedence over the purely economic principle of individual profit. The 
social virtues of the individual, embodying the "instincts of society," 
maximise prosperity through stimulating all the fundamental productive 
forces, and further the real, long-run, economic interests of the individual 
as well as those of the society. 

On the other hand, it is certain that the direct, short-sighted attempts 
of individuals (actuated by " isolation of thought and feeling ") to increase their 
advantage, often miss their aim as regards the individual, and cause loss 
to the social body as a whole. (Compare Article V.) There is, therefore, 
always room for efforts of society to compel its delinquent members to observe 
their real, long-run interests. But the argument elaborated in this and the 
foregoing Article, — that organized civil society is itself called upon to play 
the part of entrepreneur and be progress-maker in the realm of industry, is no 
necessary part of Rae's general system of speculation.] 



378 APPENDIX 

wealth, whatever adds to the wealth of the nation must 
increase the stocks of individuals. But it has always been found 
that nations have become most wealthy when they have 
engaged most extensively in commerce and manufactures. To 
encourage commerce and manuftictures by every possible 
means, should, therefore, be the great aim of the legislator ; 
and every enactment and regulation of his conducing to this 
effect, as it cannot but tend to the increase of the general 
funds, must ultimately add to the stocks of individuals. 
This view of the matter leads directly to a system of unceasing 
regulation and restraint. 

Again, on the other hand, it may be said, that, as the 
wealth of the nation is necessarily made up of the riches of 
the various individuals in it, so the national wealth would 
grow as each individual adds to the portion of it which he 
possesses. But every restraint is a hindrance to a man's 
acquiring wealth, and he always gains by evading it. As, 
therefore, all interference on the part of the legislator, operates 
as a restraint, he never in any case ought to interfere. 

As the former view of the subject produces a system of 
general regulation and restraint, this teaches the doctrine of 
complete inaction on the part of the legislator, of the removal 
of all restraint, and of perfect freedom of trade. 

Both systems proceed on the assumption of the exact iden- 
tity of public and private wealth ; of wealth, as it is the same 
word, being always the same thing, whether applied to indi- 
viduals or communities, and beinsr in its increase and decrease 
subjected in all cases to similar laws ; — an assumption flowing 
easily from the conception that its nature is very simple and 
may without difficulty be apprehended. 

The latter of these systems, that adopted by Adam Smith, 
we might expect, would at present be most popular in Europe. 
Institutions and forms very often endure after the circum- 
stances that had originally called them forth have disappeared, 
and when, consequently, their operation injuriously restrains 
the movements of some new order of things. Such seems the 
condition of most European kingdoms at present. The frame 
of their existing constitutions and laws was moulded in remote 
times, in ages of comparative barbarism and stern military rule, 



ADAM SMITH ON FREE TRADE 379 

and is, therefore, in many parts, unsuited to the circumstances 
of the present period. It is perceived that a multitude of 
abuses exist, and the efforts of the majority are directed to 
detect, expose, and do away with them. The prejudices of 
men of liberal minds and enlarged views, for even such men 
have prejudices, run consequently, rather towards overthrowing 
and rooting out, than to establishing and maintaining. A 
system of political economy, the fundamental principles of 
which inculcated the doctrine that every attempt of the ruler 
to direct the industry of the community was injurious, and 
that all laws having this tendency should be abrogated, fell in 
with the current of public opinion and could not but draw to 
itself a large body of zealous and able advocates. It is in this 
temper that Mr. Bentham addresses its author. " On this 
subject you ride triumphant, and chastise the impertinence of 
kings and ministers with a tone of authority, which it required 
a courage like yours to venture upon, and a genius like yours 
to warrant a man to assume." ^ 

It may be remarked, also, that as the circumstances of 
Europe, in remote ages, produced the former system, in the 
present give popularity to the latter ; so in North America, 
where a new form of government suited to the state which 
society has there assumed, has been established, we might 
expect, as is the case, that a medium would be taken between 
the two extremes.^ 

My main object, in this book, is to show that that notion of 
the exact identity of the causes giving rise to individual and 
national wealth, on which the reasonings and arguments of 
Adam Smith all along depend, is erroneous, that consequently 
the doctrines he has engrafted on it, cannot be thus maintained, 
and are inconsistent with facts admitted by himself. 

I have already observed that through every part of his work, 
in the conduct of all his reasonings and arguments, Adam 
Smith blends together the consideration of the processes by 
which the capitals of individuals and nations are increased, and 
always treats of them as precisely identical. Sometimes this 

1 Dejence of Usury. 

^[See "Note C " in the Appendix.] 



380 APPENDIX 

is assumed as a self-evident truth, sometimes it is a deduction 
from an ingenious theory ; but, in one shape or other, it forms 
the basis on which his whole system is built. If this simple 
view of the subject be admitted as correct, it may very easily 
be made to lead to the conclusions at which he is desirous of 
arriving. 

The axiom which he brings forward, that the capital of a 
society is the same with that of all the individuals who com- 
pose it, being granted, it follows that to increase the capitals 
of all the individuals in a society is to increase the general 
capital of the society. It seems, therefore, also to follow that 
as every man is best judge of his own business and of the 
modes in which his own capital may be augmented, so to 
prevent him from adopting these modes is to obstruct him 
in his efforts to increase his own capital, and, in so far as his 
capital is a part of the general capital of the society, to check 
the increase of that general capital; and hence, that, as all laws 
for the regulation of commerce are in fact means by which the 
legislator prevents individuals conducting their business as 
they themselves would deem best, they must operate pre- 
judicially on the increase of individual and so of general wealth. 

In pursuance of the same idea, of the perfect identity of the 
means by which individual and national capitals are increased, 
the argument is thus further enforced. Accumulation is the 
means by which individual capital is augmented. We know 
very well that if any person spend as fast as he makes, he can 
never get richer. Whatever his gains are he must save some 
part of them, else he can never add to his capital. The 
amount also of his savings for any period of time must measure 
the addition, which, during that time he makes to his wealth. 
As, therefore, the capital of a single individual is increased by 
his continually accumulating and adding to it whatever he 
saves out of his revenue, so the national capital, or the capital 
of all the individuals in a nation, is increased by these indi- 
viduals continually accumulating and adding to it what they 
save out of their respective revenues. Hence whatever pre- 
vents them from making the most of their respective capitals, 
or drawing from them the largest revenue, in so far as it 
deprives them of the power of laying past so large a portion of 



ADAM SMITH ON FREE TRADE 881 

that revenue as they otherwise would, must in a like propor- 
tion diminish their individual accumulations, and conse- 
quently the sum of all their accumulations, or the amount 
added to the national capital. But all laws for the regulation 
of commerce, and all encouragements given to particular 
branches of industry, do in fact prevent individuals from turn- 
ing their capitals into the channels which, but for these regu- 
lations, they would prefer as offering the largest returns. 
They must, therefore, it is said, to a certain extent, diminish 
individual accumulation, and consequently, in an equal propor- 
tion, the increase of national capital. 

Viewing, then, the subject in this simple light, and taking 
as undoubted truths the assumptions of our author, that 
individual and national wealth increase in the same manner, 
and that the manner in which individuals increase their 
riches is by saving from their revenues, we would easily 
arrive at the doctrine he inculcates, that as every man is 
the best judge of his own interests, so he should be left 
to pursue them in his own way, without the legislator at 
all interfering with his operations, or pretending to aid or 
direct them. 

This very simple view of the subject would, however, be 
defective in two respects. 

1. Though it is, in the general, true that individuals may 
find some employment, by the prosecution of which they may 
procure a revenue, and so, by saving from this revenue, acquire 
wealth, or add to what they have before acquired, yet it seems 
not so clear that it is by this means alone that nations advance, 
or can advance, in the acquisition of wealth ; because it must 
occur to us that materials on which the national industry may 
be employed are to be provided, and often are or may be 
"wanting. 

2. It is not altogether correct to say that the sole means 
which an individual employs to add to his capital, is the pro- 
cess of saving from revenue. It is very evident he must first 
gain this revenue, and that the amount he gains, and conse- 
quently the amount he can save, must in general depend on 
the talents and capacities he possesses for the prosecution of 
the particular employment to which he devotes himself. As 



c 

i 



382 APPENDIX 

an inquiry, therefore, into the manner in which an individual 
might most rapidly accumulate wealth, would in part resolve 
itself into an examination of the modes by which he might 
/ acquire the greatest perfection of knowledge, skill, dexterity, 
and other talents and capacities, tending to the successful pro- 
secution of his business ; so an inquiry into national wealth, 
even supposing the process by which nations and individuals ' 
add to their riches to be the same, must partly resolve itself 
into an examination of the modes by which the knowledge, 
skill, and dexterity of all the individuals in a nation, in 
the various businesses and professions that may be carried 
on in it, may be raised to the highest pitch. 

These two circumstances render the subject more intricate, 
than the first simple view we might be inclined to take of it, 
would lead us to suspect. An attention to the operation of 
either of them will be sufficient to show that that identity of 
the interests of individuals and states, which is assumed 
throughout the WealtJi of jVations, is not a self-evident prin- 
ciple. In the following observations, I shall, however, confine 
myself to the former of them. 

Individuals, it is very clear, in general, increase their 
capitals by acquiring a larger portion of the common funds. 
While one man is growing rich, another is becoming poor, and 
the change produced, seems not so much a creation of wealth, 
as a passage of it from one hand to another. These transfers 
have been going on in all ages of the world and have existed 
equally, in what has been called the advancing, the stationary, 
and the declining stages of society. Everywhere this means 
of acquiring wealth is open to individuals, and they every- 
where avail themselves of it. Let any one in any country, in 
Great Britain for instance, trace backwards for fifteen or 
twenty years the mutations that have occurred in the fortunes 
of the persons with whom he is acquainted, and he will find 
that there are few, whose circumstances are not very much 
changed from what they then were. Good conduct, good for- 
tune, and frugality have made many rich who were then poor ; 
imprudence, misfortune, prodigality have made many poor who 
were then rich. 

But while that man has thus been adding house to house. 



ADAM SMITH ON FREE TRADE 383 

and farm to farm, and this has been giving up one portion of 
property after another, till he finds all he once possessed in the 
hands of others, the whole mass of houses, lands and wealth, 
has undergone but little alteration ; the national capital itself, 
remains, comparatively, but little changed. It is not by thus 
acquiring wealth previously in the possession of others, that 
nations enrich themselves. But a very small part of the 
capital of any community, can, I suspect, be accounted for, by 
tracing its passage from any other community. Instead of one 
nation growing rich, and another poor, we rather see many 
neighbouring nations advancing at the same pace towards 
prosperity and affluence, or declining equally, to misery and 
want. As individuals seem generally to grow rich by 
grasping a larger and larger portion of the wealth already in 
existence, nations do so by the production of wealth that did 
not previously exist. The two processes differ in this, that the 
one is an acquisition, the other a creation. 

Ex nihilo nihil fit. Nothing can spring out of nothing. 
Every thing that exists must have a cause. As we do not see 
that individuals increase their wealth by creating new wealth, 
we do not think of inquiring how the riches of an individual 
came to exist, but how they came into his possession. But as 
we do not see how nations can increase their wealth, but by 
creating new wealth, we naturally inquire, what are the causes 
of the wealth of nations. 

Adam Smith asserts, and as I think truly asserts, that these 
causes are to be found in the improvement of the productive 
powers of human labor. Men, and therefore nations, are said 
to be rich or poor according to the degree in which they can 
afford to enjoy the necessaries, conveniences, and amusements 
of human life. But as it is the annual labour of the nation 
which supplies these necessaries, conveniences, and amuse- 
ments ; so as this labor is well or ill directed, the supply 
it affords must be great or small. The skill, dexterity, and 
judgment with which labor is applied ; that is, I presume, the 
facility of the operations which it employs for executing its 
ends, and the accuracy with which it conducts them, must 
consequently mainly regulate the amount which it produces. 
Thus the increase of the skill, dexterity, and judgment with 



884 APPENDIX 

which the national labor is applied, furnishes us with a cause 
for the increased productive powers of that labor, and so for 
the increase of the national wealth. 

This account of matters will be found sutticiently to agree 
with the ideas which the contemplation of their progress forces 
on every one. When we are tokl that an individual this year 
employs in agriculture double the capital which he employed 
last year, the conception which most readily presents itself to 
us is, that he now farms double the land which he then 
farmed, owns double the number of horses, cattle, farming 
utensils, etc. and has double the number of barns and other 
necessary buildings. When we are told that a country has 
double the agricultural capital which it had a century ago, we 
cannot, of course, conceive that its farms are double the extent 
they then were ; neither do we conceive that its farmers have 
simply double the number of barns and other buildings, of 
cattle, ploughs, harrows, and other farming utensils, which they 
then had. We conceive a change in the mode in which its 
fields are laid out and tilled, in the form and qualities of the 
stock, in the construction of all the implements of husbandry, 
in the size and arrangement of the barns and other buildings ; 
and that through these changes the national agricultural labor 
produces at least double the products it formerly did. It is 
this change necessarily involved in our conception of the pro- 
cess by which nations increase their capitals, and not necessarily 
involved in the process by w^hich individuals increase their 
capitals, that constitutes the difterence between them.^ 

Though they are thus essentially diflerent, there are never- 
theless two points in which they agree. When estimated in 
gold, silver, or any other instrument of exchange, the sum at 
which the agricultural property presently possessed by the 
individual would be rated, would be double that at which what 
was formerly in his possession was rated. The sum, also, at 

^ As here I merely aim at giving a very genei-al view of the subject, I only 
refer to what generally occurs. lu this and some other instances the text does 
not apply to new countries. Connnunities commonly occupy the same terri- 
tories unchanged. The growth of such communities as incretvse by occupying 
a larger and larger extent of territory, must be regulated in pvrt by laws which 
iire exceptions to those that apply to the rest of mankind. 



ADAM SMITH ON FREE TRADE 385 

which the present agricultural property of the nation would be 
rated, would be double that at which it was formerly rated. 
The things, too, that so estimated formed the increase in both, 
would have been produced by man : they would be his works. 
But though two things may both be estimated as worth a sum 
of money, and may both be works of man, it follows not that 
the principles which have produced them are perfectly similar. 
The poem of Childe Harold cost the publisher a certain sum ; 
so did the paper on which it was jjrinted. They both, too, 
were works of man, and required mental and corporeal energy 
to produce them ; but we should not, therefore, say the prin- 
ciples that produced them were precisely similar. 

Within a few centuries the national capital of Great Britain 
has increased tenfold. Could we imagine that we could tell 
this fact to some one of the men of the olden time, waked from 
the slumber of the tomb and raised up to us, we may suppose 
he would ask how it could be ; how there could have been 
produced so mighty a change ; or from whence so full a tide of 
wealth could have flowed in upon us. But were we then 
to take him abroad and show him the wonders and achieve- 
ments of art with which the land is overspread ; the various 
processes carried on in our manufactories and workshops ; the 
scientific labors of the agriculturist ; the curious mechanism 
with which the vast bulk of our ships is put together and 
guided ; fire and water transformed into our obedient drudges, 
excavating harbors and draining mines for us, carrying us over 
the land with the speed of the wind, bearing us through the 
ocean against tide and storm ; he would no longer wonder 
whence the wealth was that he saw around, or that the land 
yielded tenfold what it had done of old, though he might well 
demand how the power had been acquired that had wrought so 
great a change. 

Were such a thing possible as we are thus imagining we can 
scarce suppose that any one would be found to reply, — " the 
whole process is nothing extraordinary ; it is just the same as 
you must have, seen in your own days, when, by continual 
parsimonious saving, an individual accumulated ten times the 
capital he once had ; he began, perhaps, with one house, and 
died owning ten." Such an assertion would evidently be absurd. 

2 B 



s 



386 APPENDIX 

Invention is the only power on earth, that can be said to 
create. It enters as an essential element into the process of 
the increase of national wealth, because that process is a crea- 
tion, not an acquisition. It does not necessarily enter into the 
process of the increase of individual wealth, because that may 
be simply an acquisition, not a creation. The assumption, 
therefore, that the two processes are perfectly similar is incor- 
rect, and the doctrine which I have designated as that of the 
identity of the interests of individuals and communities cannot 
be thus established. 

The ends which individuals and nations pursue, are different. 
The object of the one is to acquire, of the other to create. The 
means which they employ, are also different ; industry and 
parsimony increase the capitals of individuals ; national wealth, 
understood in its largest and truest sense, as the wealth of all 
nations cannot be increased, but through the aid also of the 
inventive faculty. Though each member of a community may 
be desirous of the good of all, yet in gaining wealth, as he only 
seeks his own good, and as he may gain it by acquiring a por- 
tion of the wealth already in existence, it follows not that he 
creates wealth. The community adds to its wealth by creating 
wealth, and if we understand by the legislator the power acting 
for the community, it seems not absurd or unreasonable that 
he should direct part of the energies of the community towards 
the furtherance of this power of invention, this necessary ele- 
ment in the production of the wealth of nations. 

In the following cases it would at least seem not improbable, 
that the power of the legislator so directed, might be beneficial. 

I. In promoting the progress of science. 

II. In promoting the progress of art. 

1. By encouraging the discovery of new arts. 

2. By encouraging the discovery of improvements in the 
arts already practised in the country. 

3. By encouraging the discovery of methods of adapting arts 
already practised in other countries, to the particular circum- 
stances of the territory and community for which he legislates. 

In the attainment of all these objects, the aid of the inven- 
tive faculty is required. Our judgment of their propriety or 
impropriety, as far as this is determined by their direct ten- 



ADAM SMITH ON FREE TRADE SSr 

dency to promote the wealth of the community, would seem to 
depend on two circumstances. 1. On the probability of their 
success, and of this success enabling the industry of its mem- 
bers to acquire with increased facility some of the necessaries, 
conveniences, or amusements of life, the capacity for producing 
which, measures the general revenue and riches. 2. On the 
probability of the future wealth to be derived from this new 
source, being sufficient to repay the expenditure of present 
wealth necessary to open it up. 

As far as any considerations, which I have as yet presented 
to the reader, warrant us in forming a conclusion, it certainly 
does appear not impossible, or unlikely, that there might be 
instances in which the legislator might, with advantage to the 
progress of the wealth of the community, direct the energies of 
some of its members towards discoveries in all these different 
departments of knowledge and action. 

But in doing so, he always acts contrary to the doctrine which 
teaches that he ought never to disturb the natural course of 
events ; that is, the course which the efforts of individuals, 
uninterfered with, by him, would give to these events. His 
agency so directed, according to this doctrine, must be injurious ;. 
because, in every instance, it in part changes the direction, and 
in part retards the progress or the natural course of events. In 
every such instance, he directs the industry of some of the 
members of the society from gaining a revenue by the practice 
of old arts and so accumulating capital, to the discovery either 
of materials for new arts, or of means of adapting old ones to 
new countries. By doing so, he takes from the national 
revenue, and retards, consequently, the accumulation of the 
national capital. 

This doctrine, as given by Adam Smith, is in general, blended 
with theoretical principles afterwards to be considered. The 
following is an abstract of it, in his own words, from different 
parts of his system, separated from these principles. 

" The capital of all the individuals in a nation is increased 

in the same manner as that of a single individual, by their 

continually accumulating and adding to it whatever they save 

out of their revenue.^ As the national capital is thus increased 

1 Wealth of Nations, B. II. c. IV. 



388 APPENDIX 

by parsimony, so it is diminished by prodigality and miscon- 
duct. The conduct of those whose expense just equals their 
revenue, without either accumulating or encroaching, neither 
increases nor diminishes it. It can seldom happen that the 
circumstances of a great nation can be much affected by the 
prodigality of individuals ; the profusion of some, being always 
more than compensated by the frugality and good conduct of 
others. Men are prompted to expense, by the desire of present 
enjoyment, a passion only momentary and occasional. They 
are prompted to save by the desire of bettering their condition, 
a passion which comes with them from the womb, and never 
leaves them till they go to the grave. In the whole course of 
life of the greater part of men, therefore, though the principle 
of expense prevails occasionally, yet the principle of frugality 
predominates, and predominates very greatly."-^ 

" The principle exciting to frugality, the uniform, constant, 
and uninterrupted effort of every man to better his condition, 
produces both public and national, as well as private opulence, 
and is frequently more than sufficiently powerful to counteract 
the extravagance of government, and the greatest errors of 
administration. Like the unknown principle of animal life, it 
frequently restores health and vigor to the constitution, in spite, 
not only of the disease, but of the absurd prescriptions of the 
doctor. Alone and without any assistance, it is capable, not 
only of carrying on the society to wealth and prosperity, but 
of surmounting a hundred impertinent obstructions with which 
the folly of human laws too often encumbers its operations."^ 

The reader will perceive, that the whole force of these argu- 
ments lies in the assumption, that the process of the increase of 
national capital, is precisely the same as that of the increase of 
individual capital. 

The principle, therefore, of the identity of the interests of 
nations and individuals is by no means a self-evident principle. 
The identity of their interests can only follow from the identity 
of the ends which they pursue ; but these ends being, as far as 
we can see, identical only in name, and in reality not identical, 

1 Wealth of Natioiis, B. II. c. III. 
^Idem, B. II. c. III. and B. IV. c. V. 



ADAM SMITH ON FREE TRADE 389 

the presumption rather is, that the means also by which they 
are arrived at are not identical. 

It seems to me, that it requires very little pausing upon the 
examination of this principle to perceive its inconclusiveness as 
an argument. It is a principle, nevertheless, which, like other 
popular doctrines founded merely on the ambiguity of a word, 
has been very much insisted on, and meets one in all variety of 
shapes. On this account, the reader may perhaps excuse me, 
for detaining him a little longer on the consideration of it, by 
bringing before him a passage from our author, which may 
serve to expose its unsoundness, by showing how easily it may be 
made to lead to the most obvious fallacies. " The annual pro- 
duce of the land and labor of England is certainly much greater 
than it was more than a century ago at the restoration of 
Charles II. It was certainly much greater at the restoration 
than we can suppose it to have been about a hundred years 
before, at the accession of Elizabeth. At this period, too, we 
have reason to believe, the country was much more advanced 
in improvement than it had been about a century before, 
towards the close of the dissensions between the houses of 
York and Lancaster. Even then it was probably in a better 
condition than it had been at the Norman Conquest ; and at 
the Norman Conquest, than during the confusion of the Saxon 
Heptarchy. Even at this early period it was certainly a more 
improved country than at the invasion of Julius Caesar, when 
its inhabitants were nearly in the same state with the savages 
in North America. 

" In each of these periods, however, there was not only much 
private and public profusion, many expensive and unnecessary 
wars, great perversion of the annual produce from maintaining 
productive to maintain unproductive hands ; but sometimes,, 
in the confusion of civil discord, such absolute waste and 
destruction of stock as might be supposed not only to retard,, 
as it certainly did, the natural accumulation of riches, but to 
have left the country, at the end of the period, poorer than at 
the beginning. Thus, in the happiest and most fortunate 
period of them all, that which has passed since the restoration, 
how many disorders and misfortunes have occurred, which, 
could they have been foreseen, not only the impoverishment^ 



S90 APPENDIX 

"but the total ruin, of the country would have been expected 
from them. The fire and the plague of London, the two Dutch 
wars, the disorders of the Eevolution, the war in Ireland, the 
four expensive French wars of 1688, 1702, 1742, 1750, 
together with the two rebellions of 1715 and 1745. In the 
course of the four French wars the nation has contracted more 
than £145,000,000 of debt, over and above all the other 
extraordinary annual expense which they occasioned ; so that 
the whole cannot be computed at less than £200,000,000 ; so 
great a share of the annual produce of the land and labor of 
the country has, since the Eevolution, been employed upon 
different occasions in maintaining an extraordinary number of 
unproductive hands. But had not those wars given this par- 
ticular direction to so large a capital, the greater part of it 
would naturally have been employed in maintaining productive 
hands, whose labor would have replaced with a profit the whole 
value of their consumption. The value of the annual produce 
of the laud and labor of the country would have been consider- 
ably increased by it every year, and every year's increase 
would have augmented still more that of the following year. 
More houses would have been built, more lands would have 
been improved, and those which had been improved before 
would have been better cultivated ; more manufactures would 
have been established, and those which had been established 
before would have been more extended ; and to what height 
the real wealth and revenue of the country might by this time 
have been raised it is not perhaps very easy even to imagine."^ 

These conclusions would indeed all follow did individual 
and national capital augment on precisely the same principles ; 
but as the progress of the inventive faculty, an essential 
element in the increase of national wealth, is here left out of 
the calculation, we have good reason to doubt its accuracy. 

Before the time of the Essay on Population, arguments and 
conclusions very similar to these were brought forward con- 
cerning the waste of human life in wars, and the consequent 
amazing diminution of the greatness and prosperity of nations. 
Perhaps the fallacy of the one doctrine may be best exposed 
by stating the other. 

1 Wealth of Nations, B. II. c. III. 



ADAM SMITH ON FREE TRADE 391 

" Nations, it was said, can only advance in greatness and 
prosperity as the numbers of their inhabitants increase. What- 
ever the natural fertility of the soil, however genial the climate, 
and however well fitted the whole country may be for the 
practice of every species of industry, yet, if it be deficient in 
population, these natural riches can never be elaborated, and 
it must hold a poor and inconsiderable rank in the scale of 
nations. A confined and comparatively barren territory, filled 
with a numerous, industrious population, exceeds the most 
fertile and extensive country scantily peopled. It is the 
people that make the state, its real riches lie in its inhabitants. 

" But as population increases, and can only increase, by 
more coming into the world than go out of it, every man who 
marries and raises a family is a public benefactor, and the 
practice of celibacy, so far from being a virtue, is, in reality, a 
great public crime. The number, however, of those who 
marry, and have children, in all tolerably quiet and peaceable 
times, much exceeds that of those who remain single ; and, 
consequently, the number of all the inhabitants of the earth 
has continually augmented, and, had it not been for the wars 
which the ambition of princes has stirred up, would have been 
still much farther augmented. 

" The population of England is now much greater than at 
the Restoration. It was greater at the Restoration than at 
the accession of Elizabeth, and then than during the great 
civil wars. Even then it was greater than at the Conquest, 
and at that time, than at the invasion of Julius Csesar. 

" In each of these periods, however, there were not only 
many private feuds and public dissensions ; many bloody and 
harassing wars ; great perversion of the powers of the in- 
habitants from the production to the destruction of life ; but 
sometimes such dreadful massacres and bloodshed, so great 
multitudes perishing by the sword, and by famine following 
up its ravages, as might be supposed not only to have retarded 
the increase of the numbers of the inhabitants, but to have 
left them fewer at the end than at the beginning. Had it 
not been for these events, the greater part of those whom they 
carried off would have married and had children, whose whole 
xiumbers would naturally have been greater than that of the 



S92 APPENDIX 

parents who procreated them. In this manner every genera- 
tion would have exceeded proportionably the one preceding it. 
The number of industrious hands thus produced would have 
built more houses, would have improved more lands, and 
would have cultivated better those which had been improved 
before ; more manufactures would have been established, and 
those which had been established before would have been 
more extended, and how far the population of the country, 
and its real wealth and strength, might have been carried by 
this time, it is not perhaps very easy to imagine." 

The error of both reasonings arises, in the same manner^ 
from taking what is merely a necessary concomitant, for a 
cause. It is perfectly true, that the real wealth, strength, and 
prosperity of a country, cannot advance, but as its population 
advances, and that population can only advance by more being 
brought into the world than go out of it. It is also true that 
they cannot advance but as its capital advances, and that its 
capital can only advance by more being saved than is spent. 
But when it is said in either case, that as they can only 
advance as population advances, or as accumulation advances, 
we have only to allow population to go on unrestrained, or 
only to allow accumulation to go on imchecked, we are 
deceived, and led to unwarrantable conclusions, by a sort of 
sleight in the use of words. 

The contemplation of a couple contending with unremitting 
labor against the evils of poverty and want, and, however 
occasionally pinched by them themselves, warding them off 
with care and success from their offspring, and rearing up a 
numerous and industrious family, is a very pleasing sight. It 
is pleasing as an evidence of the existence of some of the best 
and purest affections of our nature ; it is pleasing, also, from 
the mere view of the healthy addition thus made to that surest 
stay of a state, an industrious and frugal population. But 
when it is hence assumed, that nothing is wanting to augment 
the numbers of the community, and carry it forward to great- 
ness, than that similar principles and conduct should be 
allowed to go on in all its members without restraint, a hasty 
and inaccurate conclusion is drawn from a partial view of a 
complicated subject. The numbers of a state can never 



ADAM SMITH ON FREE TRADE 393 

exceed, what its resources can support. When these resources 
are augmented, the principles which tend to the preservation 
and multiplication of the species arC; in all well regulated 
communities, sufficiently active speedily to fill up their 
numhers to the amount of the increased supply. 

In like manner, the contemplation of honest industry, and 
patient frugality, not only manfully bearing up against present 
necessity and want, but repelling them, and accumulating a 
plentiful store to answer the demands of futurity, is also na 
unpleasiug spectacle. But for such principles neither public 
nor private comfort or affluence could exist, or be preserved. 
But, when it is hence also assumed, that nothing else is want- 
ing to carry the community forward to the highest degree of 
affluence and power, than that similar principles and conduct, 
through all its members, should be encouraged, and allowed ta 
go on without check, a conclusion equally unwarranted and 
equally inaccurate, is drawn from a like hasty and imperfect 
view of a great subject. The capital of a state is a mere 
instrument in the hands of its industry, to enable it to draw 
forth the riches, with which the conjoined powers of nature 
and art have endowed it. A multiplication of instruments is 
of no avail, unless something additional be given on which 
they may operate. When invention succeeds in discovering 
these additional riches, the mere view is sufficient, in every 
well regulated community, to induce its members to form the 
new instruments, necessary to draw these riches forth. 

There must be some strong inherent vice in any community, 
where the certain prospect of plentiful subsistence does not 
produce an abundant population. It can only be, also, from 
the effects of some great inherent vice, that, in any community, 
a very profitable investment for capital can be held out, and 
yet capital not accumulate with rapidity. Where there is na 
sufficient prospect of subsistence, people may be restrained 
from marriage by the dread of their families suffering want. 
Where there is no sufficient prospect of profit, people may be 
withheld from accumulating capital, because they may see no 
sufficiently profitable adventure open to them that they would 
not fear to embark in. But the fact is, that people, rather 
than live single, are inclined to marry at all risks, and hence 



394 APPENDIX 

population is kept down by misery, and premature death ; and 
they are also, rather than do nothing, inclined to embark in 
adventures where the chances are against their success ; hence 
the vast numbers of unsuccessful projects that in most com- 
munities are continually dissipating previous accumulations of 
capital. To form a right judgment of the power of any com- 
munity, under the most favorable circumstances, of increasing 
its population, we must consider the additional marriages 
which would take place, and the greater numbers that would 
be reared to maturity from such as do take place, if plentiful 
subsistence were provided. In like manner, to form a right 
judgment of the powers of any community, under the most 
favorable circumstances, to increase its capital, we must con- 
sider, that, if abundance of secure and profitable investments 
for capital were presented, its members would be more eager 
to possess additional capital, and, therefore, would be more 
prompted to accumulate it ; and the capital they possessed 
would be more productive, and would not be subject to be 
risked and lost in imprudent speculations. 

From the inconsiderable rudiments of population and capital, 
which Great Britain furnished to North America, is to be 
traced the great amount of both, of which that flourishing 
division of the globe at present boasts. The former has in- 
creased so greatly, because plentiful subsistence has been 
afforded it : the latter, because profitable and secure invest- 
ments have been presented to it. Had it been possible to 
have afforded, and had the same abundant subsistence been 
afforded, to the population, and the same profitable and secure 
investments to the capital remaining within the kingdom, they 
would have both augmented, we have every reason to believe, 
in a ratio equal to that at which the fragments of both that 
went to North America have augmented. It certainly was 
not the voyage across the Atlantic, but the rich soil on which 
they fell on the other side of it, that excited them to so 
luxuriant a growth. 

This great productive power of both the population and 
capital of a country, when room is afforded them to shoot, 
seems so easily to fill up any gap which is made in the 
national numbers or stock, that a calculation founded on the 



ADAM SMITH ON FREE TRADE 395 

assumption, that any loss in either which a nation may sustain, 
necessarily occasions a proportionably permanent diminution of 
its funds must evidently be inconclusive. It is very doubtful 
if the population of Loudon or England would have been 
greater than it is at present, had there been no plague. It is 
very doubtful also if the capital of London or of England 
would have been greater than it is at present, had there been 
no great fire. The additional demand for labor and capital, 
which these disasters created, may very well be supposed 
soon to have brought both up to the amount they had 
previously attained. 

In all instances of such, or even far greater calamities, 
destroying a part of the population or capital of a country, 
while the principles and elements, through and from which 
they sprang, are not consumed along with them, we see them 
quickly reproduced. When, for example, the great destroyer 
War holds his course through a country, and clearing wide his 
path with fire and sword, leaves property and life a wreck 
behind him, we see not that the traces of his wrath are long 
perpetuated ; in the midst of the ruins of what were, lie the 
germs of what are to be, and seizing on the elements of 
existence that lie waste around, they expand with a vigor 
proportioned to the magnitude of the void that has been made 
for them, and speedily replenish it. Like the track of the 
whirlwind through the forest, the present desolation is quickly 
covered up and obliterated by the freshness of the new growth, 
to which that very desolation gives light, and air, and the 
means of existence. We should think the calculation rather 
fanciful, which, estimating the trees overborne by the blast for 
centuries, and reckoning the increase that might have possibly 
come from each of them, should bring out as a correct result, 
that all this would have been a clear addition to the vegetable 
life of the forest ; and that so much greater it must have 
been to-day, had not these disasters had place. Calculations 
proceeding on the assumption of the indefinite increase of 
population or capital, without showing also that there will 
be room for them, are but little more logical. 

Before population can advance, there must be something on 
•which it can subsist ; before capital can increase, there must 



396 APPENDIX 

be something in which it may be embodied. Produce sub- 
sistence, and, if vice prevent it not, population will follow ; 
show that if capital did exist, it would produce great profits, 
and, if vice prevent it not, capital will be accumulated. But, 
until there be some means of subsisting the population, and 
employing the capital, they can never, by simply urging on 
their production, be rationally expected to be much augmented. 
It is invention, which showing how profitable returns may 
be got from the one, and how subsistence procured for the 
other, that may most fitly be esteemed the cause of the exist- 
ence of both ; and hence this power has most title to be 
ranked as the true generator of states and people. It is 
certainly, therefore, very far from being a self-evident truth, 
that the legislator, by employing the resources of the country 
in rousing this principle to activity, necessarily retards, instead 
of advancing, the increase of wealth and the prosperity of the 
state. 

PART II. 

Though the doctrine of the identity of the interests of 
individuals and communities cannot be established as a simple 
and self-evident principle, from the assumption that the objects 
which individuals designedly pursue, for their private emolu- 
ment, are precisely those which most promote the progress of 
the general opulence ; and though in this sense, as we have 
seen, the identity of the ends which they pursue is nominal, 
not real, yet it follows not from this that the doctrine is 
necessarily erroneous. Many doctrines which are far more 
simple or self-evident are nevertheless true. Many, which at 
first sight seem even contradictory to experience, are found, by 
closer examination, to be legitimately deducible from it. It is 
manifest that the general opulence, however brought about,, 
results, in some way or another, from the action and reaction 
on each other of the whole system of persons and things, 
which constitute communities, or belong to them. It is then 
at least possible to conceive that it is entirely produced by the 
efforts of individuals to advance their private fortunes. That, 
though it is the object of individuals to acquire wealth, and of 
nations to create it, yet that the series of actions which the 



ADAM SMITH ON FREE TRADE 397 

former generate, in endeavoring to make the acquisition, are 
precisely those which are best calculated to forward the 
creation ; and that thus, unconsciously to himself, each member 
of the community, while seeking merely his own benefit, 
necessarily adopts the very course which is most for the 
advantage of the society, and, to use our author's words, " is 
led in this, as in many other instances, by an invisible hand, 
to promote an end that was no part of his intention." 

In this view of the subject the doctrine would put off the 
shape of a simple principle, and assume that of a theory 
deduced from an examination of the whole series of actions 
that are concerned in the production of the wealth of com- 
munities ; and in this way we may conceive that it might be 
satisfactorily proved by an extended inquiry into the " Nature 
of the Wealth of Nations." 

Such is the theory of this department of human action, 
which the author gives. If it be found not to be inconsistent 
with the phenomena, but fairly deduced from them, the truth 
of the peculiar doctrine, which it is the aim of his work to 
maintain, would be established by it. 

Before endeavoring to explain it, or attempting to show 
wherein it fails, it is proper to remark that it is blended, 
throughout the whole work, with that notion of the exact 
identity of the ends which nations and individuals pursue, 
the fallacy of which I trust I have, in some measure, exposed 
in the preceding chapter. I shall afterwards have occasion to 
show that this arrangement of his materials sometimes renders 
his arguments illogical. I am led to notice it at present, 
because I wish to account for the appearance of this assump- 
tion, unremarked by me, in the analysis of the theory I am 
about to give. 

It must be apparent to every one acquainted with the 
system, that its parts would not in any way hang together, if 
deprived of the support which this popular notion gives to 
them. Indeed, I conceive that the truest account that could 
be given of it, would be to say, that it is altogether founded on 
the assumption that national and individual wealth and pros- 
perity' increase, and must increase, in precisely the same 
manner ; and that the theoretical part of it merely serves to 



398 APPENDIX 

show how the increase of individual wealth does, in reality, 
produce the events which we see accompanying national 
wealth ; that the former is the cause, and the sole cause, of 
the latter, and must therefore produce all the phenomena 
attendant on it, being taken for an undeniable fact, and the 
author seeming merely to have proposed to show how it may 
be supposed to produce those phenomena. Thus, were what 
was once the popular doctrine concerning population still held 
to be the correct one, and were we to take it for granted as an 
undeniable truth, that, as the national strength, and revenue, 
and wealth can only advance as the number of industrious 
hands that form them is increased, so every augmentation of 
the population of a nation is an addition to the national funds, 
and that, therefore, things ought to be allowed to take their 
natural course , and all restraints on marriage be done away 
with, the assumption and doctrine might be supported by a 
theory, showing, or endeavoring to show, how all the phenomena 
attending the advance of mankind towards prosperity and 
aftiueuee do, in fact, result from their increasing numbers. 

It might, perhaps, in support of such a view of the subject, 
be said, " that, as necessity is the mother of invention, so, 
unless pressed by want, or the dread of it, mankind might 
never have exercised their ingenuity in discovering even the 
rudiments of the arts ; and certainly would not have advanced 
them beyond the most unformed and imperfect elements. That, 
while in genial climates the spontaneous fruits of the earth 
afforded them abundant nourishment, they could have had no 
motive to tax the labor of either their minds or bodies to pro- 
duce that for which they had no need. That it was the 
increase of their numbers, which, rendering the supplies that 
nature had dealt out to them insufficient, imposed the task on 
them of searching out the means of procuring additions to 
them : and that thus necessity, 

' Cuns acueus luortalia corda 
***** 
Vt vaiias usus meditando extundeiet artes 
Paulatim, etc. — ' 

' Whetting human industry by care -'^ 

That studious need might useful arts explore,' 



ADAM SMITH ON FREE TRADE 399 

is in truth the divinity that taught mankind the most essential 
arts. 

' Primo Ceres ferro mortales vertere terram 
Instituit ; cum jam glandes atque arbuta sacrae 
Defecerunt sylvee et victum Dodona negavit.' 
' First Ceres taught the ground with grain to sow, 
And armed with iron shares the crooked plough ; 
When now Dodonian oaks no more supplied 
Their mast, and trees their forest fruit denied.' ^ 

" That this urgent necessity, this imperious mistress, which 
nature caused to spring from their increasing numbers, made 
them spread themselves over the earth, and people even the 
most rigorous climates. That the ' rigid lore ' of the ' stern 
rugged nurse ' thus imposed on them, though harsh, was 
healthful ; as a proof of which we may observe, that men in 
general subsist in greatest comfort and abundance, where the 
climate is most forbidding, and the soil most stubborn, because 
there, that they may subsist at all, they have been obliged to 
call to their succour the most ingenious arts, and the most 
indefatigalile industry, 

' Labor omnia vincit 
Iraprobus et duris urgens in rebus egestas.' 
' What cannot endless labor urged by need ? ' 

" That, as it is the action of this principle which has given rise 
to all the arts, so it is it which has brought them to perfection. 
That, while a territory is scantily peopled, and its inhabitants 
spread over it at a great distance from each other, they can 
never subdivide themselves into different trades and employ- 
ments, and each devoting himself to a particular business and 
art, exercise his whole ingenuity to bring that particular occu- 
pation to perfection ; and that hence arts are in general in the 
most flourishing condition, where the population is the most 
dense. 

" That to these causes, thus necessarily proceeding from this 
great principle, we are to ascribe in particular both the opulence 
and prosperity of our own nation, and the necessary diffusion 
of the arts, manners, language, and race, with which they are 
connected, and in which they are embodied, over the remotest 

^[Virgil, Georgics, I. 149 f (Dryden's Trsl.).'\ 



400 APPENDIX 

regions of the globe. That thus, although men in marrying 
seek only their own good, they nevertheless adopt that course 
which is most to the advantage of society ; and here too, as 
in many other instances, are led by an invisible hand to pro- 
mote an end which was no part of their intention. That, 
therefore, as the revenue and power of a nation can only 
increase as its population increases, and as the increase of 
population tends to give a beginning to every useful art, and 
to carry it to the highest perfection, legislators act a very 
absurd and culpable part in attempting, in any instance to 
restrain it, or to check what is undoubtedly the natural, and 
apparently the most beneficial course of events." 

Such a theory, like almost every other view of only one side 
of a complicated subject, would probably be partly correct, and 
partly erroneous ; but it might be possible to embrace in it 
a great mass of facts, and perhaps to give it considerable 
plausibility. 

In examining the soundness of the doctrine founded on it, 
it might first be expedient to allow the assumptions necessarily 
involved in it to pass unnoticed, and to test its accuracy by an 
application to facts. Such is the course which I mean to 
follow in this introductory examination of the somewhat similar 
theory, as it seems to me, which is the groundwork for the vast 
and varied accumulation of facts and opinions embodied in the 
Wealth of Nations. I shall allow the author's assumptions to 
pass unquestioned in all cases where they are mixed with the 
explanation of real events, thongh I may esteem that explana- 
tion erroneous ; and it is only where, alone and unconnected 
with facts, they are brought forward for the purpose of argu- 
ments — as incontrovertible truths in order to establish the 
particular doctrine which I combat, — that I will feel myself 
called on to expose the fallacies into which they lead. 

The celebrated author remarks, " that it is from his labor 
alone that man can draw the necessaries, the conveniences, the 
amusements of human life, from the materials which nature 
has placed around him. As the amount of these necessaries, 
conveniences, and amusements, which any man can afford to 
enjoy, constitutes his riches ; so the amount of them which all 
the men in the nation can enjoy constitutes the national riches. 



ADAM SMITH ON FREE TRADE 401 

Labor, then, being the first price, the original purchase money, 
that is paid for all things, an inquiry into national wealth is, 
in fact, an inquiry into the means by which the labor of the 
individuals composing a nation may produce, from the materials 
they possess, the greatest amount of necessaries, conveniences, 
and amusements. 

" These may either be the immediate produce of that labor, 
or what is purchased with that produce from other nations. 
Hence such an inquiry may be divided into two parts ; the first 
treating of the means by which the produce of the national 
labor becomes greatest ; the second, of the manner in which 
the part transferred to other nations procures for them, in 
return, the greatest amount of necessaries, conveniences, and 
amusements. 

" First, then, may be considered the sources of wealth that 
lie altogether within the society, the means of bringing, by the 
labor of its members, out of the materials which it possesses, 
the greatest amount of products ; that is, of articles affording, 
necessaries, conveniences, or amusements. 

" This, in any particular nation, must be regulated by two 
circumstances. First, by the skill, dexterity, and judgment 
with which its labor is generally applied ; secondly, by the 
proportion between the number of those who are employed in 
useful labor, and that of those who are not so employed." It 
is to the first of these circumstances, which he observes is of 
much the greater influence, that our author's reasonings chiefly 
refer, and to the consideration of it, therefore, we may altogether 
confine ourselves. 

" The chief cause operating on this, the main source of the 
productiveness of labor, is capital. Without capital, industry 
could scarce at all exist. While a man is executing a piece of 
labor, he must have, to maintain him, a stock of goods, and he 
must have ready provided for him the tools and materials 
necessary for performing the work. These are all procured by 
capital. A weaver, for instance, could not apply himself to 
manufacture a web of cloth, unless there were stored up for 
him a supply of food, and other necessaries, sufficient to main- 
tain him till he complete and sell it, and were he not provided 
beforehand with a loom and other requisite tools and materials. 

2 c 



40-2 ArrENDIX 

It is capital wliieli provides all these, either his own or that of 
some other person. 

" As capital is thus the most essential element in setting 
industry in nu>tion, so it is by the amount of it, that the pro- 
ductiveness of that industry is chietly determined. 

" Every man having capital naturally endeavors to make 
the most of it ; that is, to cause the labor whiih it puts in 
motion to yield the greatest anunnit of productions. This he 
effects by the division of that labor; that is, by separating the 
operations it has to perlbrm into as numy distinct parts as 
possible, and allotting each of them to one man, or one set of 
men, as a peculiar employnuMit. 

" The increase arising to the productive powers of labor, 
from this division of it, is owing to three dill'erent circum- 
stances. First, to the increase of dexterity in every particular 
workman ; secondly, to the saving of the time which is 
conimonly lost in passing from one species of work to another ; 
lastly, to the invention of a great number of nuichines which 
facilitate and abridge labor. 

" First, the improvenumt of the dexterity of the workman 
necessarily increases the quantity of the work he can perform ; 
and the ilivision of labor, by reducing every num's business to 
some one simple operation, and by making this operation the 
sole employment of his life, necessarily increases by nuich the 
dexterity of the worknum. A common smith, for instance, will 
scarce make more than three hundred nails a day, and those 
very bad ones. A boy who has devoted himself entirely to the 
business of making nails, can make upwards of two thousand. 

" Secondly, time is not wasted in passing from one work to 
another, and the indolent sauntering habits induced by the 
frequent change of employment are avoided. 

" Thirdly, the invention of all those machines by which labor 
is so much facilitated and abridged, seems to have been 
originally owing to the division of labor. In consequence of it, 
the whole of every man's attention comes naturally to be 
directed to some one very simple object. It is naturally to be 
expected, therefore, that some one or other of those who are 
employed in each particular branch of labor should tind out 
easier and readier methods of performing their own particular 



ADAM SMITH ON FREE TRADE 403 

work, wherever the nature of it admits of improvement. In 
this mode a great number of such improvements on the pro- 
ductive power of labor have been made. 

" The other improvements in machinery and manufactures ^ 
have been also owing to the division of labor. Many of them 
have been made by the ingenuity of those, who, from this 
separation of employments, have taken up the trade of making 
such machines ; others, by that class of citizens of whom 
also philosophy or speculation becomes the sole trade and 
occupation. 

" The perfection to which this division of labor may be 
carried depends on the amount of capital that sets it in 
motion ; because the same number of workmen, executing a 
greater quantity of work in proportion as they are better 
classified and divided, require consequently, when so classified, 
a larger stock of materials, and the extent of the stock of 
materials provided must be regulated by the amount of capital 
accumulated. Again, when so divided, they both require and 
cause to be invented many new machines. These machines, 
also, can only be procured by a capital previously stored up. 
Not only, however, does the accumulation of capital, by pro- 
viding more abundant materials and better machines, enable 
the same number of workmen to be better divided, and to 
produce more work, but it also may be observed that the 
number of workmen in any branch of business increases with 
the division of labor in that branch. Thus the increased 
accumulation of capital, by effecting a more and more extended 
division of labor, not only increases the productiveness of the 
labor of the same number of workmen, but adds to that 
number. By both means, therefore, it greatly augments the 
total riches of the society, the amount of necessaries, conveni- 
ences, and amusements produced by its members, and conse- 
quently enjoyed by them. 

"These productions which labor by the aid of capital 
effects, have to be transported to the places where they are to 
be consumed, have there to be stored up till they may be 
wanted, when they have to be divided into small portions, 
suited to the convenience of the persons who are to use them. 

^ I add this word because the chain of reasoning seems to require it. 



404 APPENDIX 

The dealers in wholesale and retail are enabled to perform 
these useful offices by the instrumentality of capital, and the 
greater the amount of that capital the more easily and 
effectually they can perform them. Hence, every addition 
their economy makes to that amount, tends also to the increase 
of the general prosperity. 

" The division of labor is limited by the extent of the 
market. Before any man, or any set of men, can in common 
prudence devote themselves to any particular employment, 
they must be assured that they can dispose of the commodity 
which their exertions in the prosecution of that employment 
will produce. In situations where there is not a sufficient 
number of customers near at hand to consume the manufactured 
article, or where it cannot with advantage be transported to 
those at a distance, the making of that article can never 
become the exclusive employment of any man, or set of men. 
When, therefore, there is not a sufficiently extensive market, 
labor cannot be so much subdivided as it otherwise would, and 
its productive powers are cramped for want of room in which 
to exert themselves. The increase of capital extends the 
market by adding to the numbers and general opulence of the 
community, and by facilitating the modes of communication 
between all parts of the territories which it possesses ; and this 
extending market gives, in turn, additional celerity to the 
increase of capital." 

To this accumulation of capital, this continual parsimonious 
saving out of revenue, the principle that, according to our 
author, animates the whole progressive movement of the 
society, he assigns the following limit. 

" When the stocks of many rich merchants are turned into 
the same trade, their mutual competition naturally tends to 
lower its profit ; and, where there is a like increase of stock in 
all the different trades carried on in the same society, the same 
competition must produce the same effect in them all. As, 
then, the profits of capital continually lower with its augmenta- 
tion, there must arrive a period when they will be so diminished 
as to render it no longer possible to save any part of them." 
When this period arrives, the country would then, I think, 
according to our author, have acquired its full complement of 



ADAM SMITH ON FREE TRADE 405 

riches ; every branch of business therein having the greatest 
quantity of capital that could be employed in it. 

" But besides the immediate produce of its own industry, a 
country that has made any progress in the accumulation of 
capital, and consequent division of labor and facility of pro- 
duction, comes to furnish other countries with many articles, 
and, in exchange, to receive from them many other articles. 
This forms another source from whence the necessaries, con- 
veniences, and amusements of nations may be supplied. A 
country is enabled to do this from two causes. The soil, 
climate, and natural productions of countries are various. 
Hence one country has generally peculiar advantages over 
others in manufacturing certain articles. Again, one country 
exceeds another in the amount of capital it possesses, and 
consequently in the skill with which its industry is applied ; 
hence, also, there are articles which it can produce in greater 
perfection than other countries, with greater facility, or both. 

" This is the origin, and these are the advantages, of foreign 
trade. By means of it two or more nations are enabled to 
exchange with one another what would otherwise have been to 
each superfluous for what, through these exchanges, procures 
to each an additional amount of the necessaries, conveniences, 
and amusements of life. 

" It is capital which enables them to effect these beneficial 
exchanges, and the amount of them must be limited by the 
amount of capital that can be embarked in the employment." 
What quantity of capital this employment may absorb, what 
quantity of productions may thus -be exchanged between 
different countries, is a problem which our author has not, as 
far as I perceive, given us certain data for solving. Some of 
his followers think it illimitable, but it is clear that this was 
not his opinion, and that, though he did not assign the limits^ 
he nevertheless believed there were limits to it. Accordingly 
he makes another channel, through which, when these are 
filled, it may flow, gathering still volume to itself, and adding 
to the national prosperity as it proceeds. 

" This is what is called the carrying trade, the carrying the 
surplus produce of one nation to another. Two countries may 
have products which it would be advantageous for them to 



406 APPENDIX 

exchange, but they may not have capital sufficient to provide 
the means necessary for effecting this exchange. In such 
case, another nation having a superabundant capital may 
embark part of it in performing this office for them, and 
into this employment a country so circumstanced naturally 
directs such a capital. When the capital stock of any 
country is increased in such a degree, that it cannot be all 
employed in supplying the consumption, and supporting the 
productive labor of that particular country, the surplus part 
of it naturally disgorges itself into the carrying trade, and is 
employed in performing the same offices to other countries." ^ 

It may be observed, however, with regard to this last 
employment, which our author assigns to capital, that it 
implies a superiority in the progress of the productive in- 
dustry of the country enjoying the trade, which cannot be 
calculated on beforehand. A nation can only possess a 
carrying trade, from other nations wanting foreign trade. 
Though it may, therefore, form a source of gain to a par- 
ticular nation, it seems not so properly to be reckoned 
among the causes of the wealth of nations ; for, with the 
general progress of that wealth, according to the theory of 
our author, it would decay. 

The ingenious theory, of the main elements of which, I 
have thus attempted to delineate the outlines, its eminent 
author has illustrated with a felicity of observation, and 
laboriousness of research, which it were as vain to attempt 
to depreciate, as superfluous to praise. He conceives that it 
establishes the following conclusions. 

" The natural eftbrt of every individual to better his own 
condition, when suffered to exert itself with freedom and 
security, is so powerful a principle, that it is alone, and 
without any assistance, not only capable of carrying on the 
society to wealth and prosperity, but of surmounting a hun- 
dred impertinent obstructions with which the folly of human 
laws too often encumbers its operations ; though the effect 
of these obstructions is always, more or less, either to 
encroach upon its freedom or to diminish its security." ^ 
That " every system which endeavors, either, by extraordinary 

1 Wealth of Na'ions, B. II. c. V. 2 g. IV. c. V. 



ADAM SMITH ON FREE TRADE 407 

encouragements to draw towards a particular species of in- 
dustry a greater share of the capital of the society, than 
what would naturally go to it, or, by extraordinary restraints, 
to force from a particular species of industry some share 
of the capital which would otherwise be employed in it, 
is, in reality, subversive of the great purpose which it 
means to promote. It retards instead of accelerating, the 
progress of the society towards wealth and greatness ; and 
diminishes, instead of increasing, the real value of the annual 
produce of its land and labor." And therefore, that " all 
systems, either of preference or restraint, being completely 
taken away, the obvious and simple system of natural liberty 
establishes itself of its own accord. Every man, as long 
as he does not violate the laws of justice, is left perfectly 
free to pursue his own interest his own way, and to bring 
both his industry and capital into competition with those of 
any other man, or order of men. The sovereign is completely 
discharged from a duty, in attempting to perform which he 
must always be exposed to innumerable delusions, and for the 
proper performance of which no human wisdom or knowledge 
could ever be sufficient ; the duty of superintending the 
industry of private people, and of directing it towards the 
employments most suitable to the interest of the society." ^ 

I expect in the sequel to show that the system contains 
certain fundamental errors invalidating very many of the 
conclusions, which the author desires to establish. In the 
mean time, passing all such discussions, and viewing the 
subject in something of the light in which it seems to have 
been contemplated by Adam Smith himself, I would observe, 
that his system, if correct, must be consistent with itself, and 
with admitted facts. His theory pretends to show, that the 
source of the wealth of nations, the abundance, that is, of all 
the materials of comfort and enjoyment, the necessaries, the 
conveniences, the amusements of life which men possess, is 
to be found in the gradual accumulation of capital by the 
undisturbed industry and economy of individuals, continually 
through the division of labor, introducing improvements in 
the modes in which this labor operates with that capital, and, 

1 Wealth of Nations, B. IV. c. IX. 



408 APPENDIX 

consequently, increasing with the greatest possible rapidity the 
returns from them. His doctrine is, that the accumulation 
of capital by individuals, being thus the only thing required 
to produce that abundance with the greatest possible rapidity, 
ought never to be interfered with by the legislator ; and 
that, if he does so, it must necessarily be to the detriment 
of the society for which he legislates. If, therefore, even 
according to him, there are other sources, than the mere 
accumulation of capital, and consequent division of labor, on 
which nations are dependent for turning their labor and 
capital to the best account, and thus drawing from their 
resources the most abundant returns of necessaries, conveni- 
ences, and amusements, that is of wealth ; in so far, his theory 
would seem imperfect, and his doctrine inapplicable. If we 
now turn in particular to the part of the system with which 
we are specially interested, we find, in reality, that as far as 
it is concerned, the theory is thus inconsistent with events 
admitted by its author, that hence this portion of it is con- 
tradictory to itself, and to admitted phenomena, and that 
consequently the doctrine drawn from it cannot here be 
maintained. 

In the account of the progress of opulence, given in the 
Wealth of Nations, we find assigned, as one of the causes 
of it, the introduction into a country of new numufactures. 
" According to the natural course of things," we are told, 
" the greater part of the wealth of any growing society is 
first directed to agriculture, afterwards to manufactures, and 
last of all to foreign commerce." ^ " After agriculture, the 
capital employed in manufactures puts into motion the greatest 
quantity of productive labor." ^ The utility of such manu- 
factures is enlarged on in many parts of the work. " They 
give a new value to the surplus part of the rude produce by 
saving the expense of carrying it to the water side, or to 
some distant market, and they furnish cultivators with some- 
thing in exchange for it, that is either useful or agreeable 
to them, upon easier terms than they could have obtained 
it before. The cultivators get a better price for their sur- 
plus produce, and can purchase cheaper other conveniences 
nVealth of Natiom, B. III. c. IX. -B. II. c. V. 



ADAM SMITH ON FREE TRADE 40r> 

which they have occasion for. They are thus encouraged 
and enabled to increase this stfrplus produce by a farther 
improvement and better cultivation of the land ; and as the 
fertility of the land had given birth to the manufacture, so 
the progress of the manufacture reacts upon the land, and 
increases still farther its fertility. The manufacturers first 
supply the neighborhood, and, as their work improves and 
refines, more distant markets. For though neither the rude 
produce nor even the coarse manufacture could, without the 
greatest difficulty, support the expense of a considerable land 
carriage, the refined and improved manufacture easily may. 
In a small bulk it frequently contains the price of a great 
quantity of rude produce." ^ " The revenue of a trading and 
manufacturing country must, other things being equal, always 
be much greater than that of one without trade or manu- 
factures. By means of trade and manufactures a greater 
quantity of subsistence can be annually imported into a 
country than what its own lands, in the actual state of 
their cultivation, could afford. The inhabitants of a town, 
though they frequently possess no lands of their own, yet 
draw to themselves, by their industry, such a quantity of 
the rude produce of the lands of other people as supply 
them, not only with the materials of their work, but with 
the fund of their subsistence. What a town always is in 
regard to the country in its neighbourhood, one independent 
state or country may frequently be with regard to other 
independent states or countries.^ Commerce and manufac- 
tures gradually introduced order and good government " (into 
Europe), " and with them the liberty and security of indi- 
viduals among the inhabitants of the country, who had 
before lived almost in a continual state of war with their 
neighbors, and of servile dependency upon their superiors."^ 

" No foreign war, of great expense or duration, could con- 
veniently Ije carried on by the exportation of the rude produce 
of the soil. The expense of sending such a quantity of it to a 
foreign country as might purchase the pay and provisions of an 
army would be too great. Few countries, too, produce much 
more produce than what is sufficient for the subsistence of 
1 Wealth of NafAons, B. III. c. III. '^B. IV. c. IX. ''B. III. c. IV. 



410 APPENDIX 

their own inhabitants. To send abroad any great quantity of 
it, therefore, would be to send abroad a part of the necessary 
subsistence of the people. It is otherwise with the exporta- 
tion of manufactures. The maintenance of the people employed 
in them is kept at home, and only the surplus part of their 
work is exported. Among nations to whom commerce and 
manufactures are little known, the sovereign, upon extra- 
ordinary occasions, can seldom draw any considerable aid from 
his subjects.^ In modern war the great expense of tire arms 
gives an evident advantage to the nation which can best afford 
that expense ; and, consequently, to an opulent and civilized 
over a poor and barbarous nation." 

According to our author, some of these manufactures pro- 
ceed from the original rude arts of the country cultivated and 
refined by the gradual progress of capital and of the division of 
labor ; others are introduced from foreign states. This transfer 
takes place in the following manner. Trade first, by degrees, 
introduces a taste for the foreign manufacture ; the demand for 
it increases with time and the opulence of the society. But 
when this trade has become so general as to occasion an exten- 
sive consumption, the merchants of the country, to save the 
expense attending the transport of the article from a foreign 
country, introduce the manutacture of it at home. 

In some cases, then, the increase of capital, arising from the 
accumulation of individuals, and division of labour thence 
arising, is not, it would appear, sutficieut alone to account for 
the progress of improvement, and consequent production of 
fresh funds out of which wealth may grow. For, in cases 
where the raw materials exist, and capital to divide labor and 
put it in motion also exists, these are sometimes confessedly 
dependent on the importation of new arts from other countries, 
for the means of being advantageously directed. These ad- 
mitted facts are certainly not in accordance with our author's 
theory. Passing, however, the consideration of this at present, 
I should wish to direct the reader's attention to the applica- 
tion of his peculiar doctrines to events of this class ; and, 
that I may do so, it is necessary to examine them with some- 
what more attention. 

1 Wealth of Nations, B. IV. c. I. 



ADAM SMITH ON I'REE TRADE 411 

When goods are transported from a distance, a great part of 
their price is made up of the expense, attending the transport. 
This arises not merely from the simple expense of carriage, but 
from the risk attending it, from the perils of land and water, 
and the carelessness or knavery of those who are entrusted 
with it; from the profits which the different capitalists, 
through whom they may be transferred, exact, and from the 
damage to which commodities are subject by being long kept 
on hand. The price of very many commodities transported 
from one country to another is doubled by the influence of 
these causes ; not a few of them derive more than three fourths 
of their value from them. 

Hence the transfer of the manufacture of such goods to the 
countries to which, when manufactured, they were before sent, 
is very highly advantageous to those countries. It is advan- 
tageous from the saving to the national income which it effects 
by doing away with the expense of transport ; from furnishing, 
according to our author, a new and more profitable employ- 
ment for capital ; and from the general effects it produces on 
the national prosperity, as exemplified by him in the passages 
i have quoted. It must be allowed, moreover, that this intro- 
duction of such manufactures, by the violent operation, as he 
terms it, of the stocks of particular merchants and undertakers, 
who establish them in imitation of some foreign manufactures 
of the same kind, is a matter of great difficulty. 

For, in the first place, the materials which the home supply 
affords, will, in all probability, be not altogether similar to 
those that are used for the same purpose in the foreign country. 
vSome may be better, some worse adapted to the purpose, but 
they can scarcely be altogether alike. They must vary, too, in 
their price, some being cheaper, some dearer, than in the 
country from whence the manufacture is brought. 

The greater part of manufactures are also influenced by the 
climate. The dryness or moisture of the atmosphere, the 
degrees of heat and cold, the brightness of the sky and conse- 
quent intensity of the light, are circumstances which all, more 
or less, affect many manufactures. 

The proportion between the rates of wages and profits of stock 
is also very different in different countries, and it considerably 



412 APPENDIX 

intluoueos the dotonninatiou ot" what may be the most advan- 
tageous mode of conducting any process in any country. 

When the discovery of that exact mode of procedure, which 
the relations and connexions that these new circumstances 
have to each other renders most expedient, has once been made, 
it may be found that they are on the whole more favorable 
and such as will produce a better article, at less cost, in the 
country to which the manufacture is transported, than in that 
in which it was originally exercised. To make the discovery, 
however, of this exact procedure is always a matter of dilViculty, 
and implies almost necessarily the previous commission of 
many errors and mistakes, and the incurring of much needless 
expense and loss. A single individual, whatever intelligence 
and application he may possess, can scarce hope to arrive at it; 
it requires the eftbrts of many individuals, continued through 
a considerable course of time. 

But these moditications, in the process of any manufacture, 
which its removal from one country to another demands, are 
far from being the only dilliculty attending that removal. An 
accurate knowledge of the principles of the manufacture, and 
of the manner in which every part of it is carried on in the 
foreign country, nuist be obtained ; the requisite machinery has 
to be provided, and workmen, possessing the skill and dexterity 
which each part of the process requires, must be procured. 
These are generally matters of great ditliculty. 

Very few individuals have a thorough knowledge of every 
different part of any complicated manufacture. In examining 
any large and successful manufacturing establishment, we com- 
monly find that the various parts of it depend, for the perfection 
with which they are conducted, on the eftbrts of ditierent 
individuals, who devote their whole attention to their own 
departments, and are not at all qualified to change places with 
each other ; while the director of the whole has only such a 
general knowledge of each as enables him to say when it is 
properly conducted, not himself to point out the exact mode of 
best conducting it. It is his business to preserve the economy 
of the whole, and to search out the individuals best fitted for 
carrying on every part. Hence the undertaker of any such 
work, in a country where it has not been practised, has not 



ADAM SMITH ON FREE TRADE 413 

only to engage one, but generally many individuals, in order 
that the different processes of the manufacture may be pro- 
perly conducted. The difficulty of finding persons of sufficient 
intelligence and integrity for the purpose, who will remove to 
a distant country, without an extravagant reward, is very 
great, and the risk of being imposed on by engaging persons of 
insufficient skill, and consequently suffering considerable loss, 
is not small. The difficulty of transporting, or of constructing 
there, the necessary machinery, is often still greater ; and when 
these are procured, workmen having the requisite skill and 
dexterity for performing the mere manual part are still want- 
ing. These, if brought from a foreign country, as is often 
necessary, can only be induced to expatriate themselves by the 
receipt of exorbitant wages ; and, even if the natives of the 
country where the new manufacture is to be established can be 
trained from the first to execute the necessary manual opera- 
tions, besides the loss arising from their deficient dexterity, 
they will demand higher wages than those engaged in estab- 
lished employments. A man naturally prefers continuing in 
any sort of work which he understands, rather than displaying 
his awkwardness in attempting to perform an operation that is 
strange to him. Besides, he has, in general, reason to appre- 
hend that, should the new manufacture fail, he will have 
difficulty in again finding employment in the trade he had for- 
saken. On these accounts it happens that " when a projector 
attempts to establish a new manufacture, he must at first entice 
his workmen from other employments by higher wages than 
they can either earn in their own trades, or than the nature of 
his work would otherwise require ; and a considerable time 
must pass away before he can venture to reduce them to the 
common level." ^ 

All tliese circumstances create so many obstacles to the 
efforts of private individuals, in their endeavors to carry a 
manufacture from a country in which it already prospers, to 
another in which it is unknown, that it is, I believe, very rarely 
they have succeeded in doing so, without the occurrence of some 
favorable conjuncture of events, to aid them in the project. '' 

In point of fact it will be found, that the transfer of 
^ Wm/th ofNaliom, B. I. c. X. 



4U APPENDIX 

manufactures from one nation to another, or rather the general 
propagation, through all countries, of this most important source 
of the opulence of every one, has been chietiy owing to causes> 
which, at first sight, would seem little calculated to produce so 
beneficial efiects. Wars and conquests, tyranny anil persecu- 
tion, the jealousy and hatred of rival states, have, strange to 
say, been the main agents in disseminating arts and industry 
over the globe, and thus ameliorating the social condition of 
the whole human race. Events, that, to those to whom they 
happened, brought nothing but calamity and suftering, have 
procured prosperity and opulence to the generations that have 
succeeded them, — convulsions, that disturb and derange the 
frame of civil society, like those which occasionally shake and 
desolate the globe, in the midst of present destruction and 
devastation, carrying often the elements of future fertility and 
abundance. 

Manufactures have commonly been carried to a distance by 
the men who have exercised those manufactures. But no one 
willingly expatriates himself. They even, who would seem to 
have least to attach them to their native soil, the poor mechanic, 
and drudging laborer, cling to it with the greatest tenacity, and 
generally quit it not, unless forced from it by inevitable neces- 
sity or by the continued pressure of some heavy evil. In this 
way the ills that the tyranny of despots, or civil and religious 
factions, or war, or famine, bring upon communities, have often 
compelled great numbers of their most industrious citizens, 
to abandon their homes, and seek refuge in foreign countries. 
These emigrations have been powerfully instrumental in im- 
proving the arts of civilized life and diti'using a knowledge of 
them over the earth. Perhaps few arts would have nmch 
passed the narrow limits to which their first discovery confined 
them, had not communities been subject to be torn in pieces, 
and scattered abroad, by the violence of the events to which 
we allude, and which have been taking place in every age since 
the world began. Whenever such emigrations occur, they 
carry the knowledge and skill of the countries they leave, into 
those in which they settle, and diffuse them over them ; by 
bringing together the different arts of different countries, they 
enable one to borrow from the other, and raise all nearer to 



ADAM SMITH ON FREE TRADE 415 

perfection ; and, by giving opportunity to them to unite with 
one another, from that union, they occasionally produce some 
that did not before exist. In all these modes, they have pro- 
moted very greatly the progress of human improvement. The 
influence of these causes, though more powerful in remote ages 
than in the present times, has not yet ceased. It is shown in. 
events of very recent date or actual progress. To it we chiefly 
owe the origin of those flourishing states, which the European 
race have raised up in North America ; and the rapid progress- 
over the Western Hemisphere, of every improvement that art 
or science effects in the Eastern. 

Besides the direct agency which these outbreakings of the 
violent passions of mankind, by disturbing and deranging the 
smooth and uniform course of human existence, have had in 
casting it into new and often improved forms, they have pro- 
duced similar effects in a manner less conspicuous and evident. 
Commerce introduces a taste for the productions of the arts of 
one country into others, which are remote from it. These pro- 
ductions, at first regarded as mere superfluities or luxuries, pass, 
in time and from habit, into things essential to the comfort, 
almost to the existence, of those who have become accustomed 
to their use. War interrupts this commerce and thus cuts off 
the supply that it afforded of such articles. Excited by the 
rewards offered by the eagerness of a demand that cannot be 
supplied from abroad, the domestic industry of the country then 
exerts itself, first, to produce rude imitations of the foreign 
commodity, and at length, rival manufactures. This is a cause 
which has extensively operated in modern times, in spreading 
manufactures from country to country. It is to the wars 
springing out of the French revolution, and the interruption to 
European commerce that they occasioned, that the first rise of 
many manufactures in different parts of the old and new world, 
which are now in a very prosperous condition, is to be traced. 

But besides the influence which the violent operation of 
foreign wars, and intestine commotions, has had in promoting 
the propagation of arts over the world, many of them unques- 
tionably have been encouraged and enabled to extend themselves 
to, and take root in, countries remote from the seats where they 
originally flourished, by the direct efforts of the legislators of 



416 APPENDIX 

such countries, to draw them there, to cherish their first feeble 
advances, and to promote their subsequent growth and vigor. 
There are very few productions of modern art, that do not 
stand indebted to the legishitors of the countries in which they 
are manufactured, for their advancement and perfection. 

These three causes have, generally, more or less co-operated 
with each other in the extension and advancement of every 
branch of art. The cases where the efforts of private indivi- 
duals, unaided by one or all of them, have been successful in 
transferring any manufacture to a distant country, are, as I 
have already observed, exceedingly rare. 

In accordance with the doctrine which he supports through- 
out, it is here maintained by our author that the last of these 
causes operating in the production of new arts, or in their 
introduction into a country, viz., the interference of the legis- 
lator, is improper, because necessarily injurious ; and that his 
agency, so directed, always, and from its very nature, instead 
of promoting the advancement of the general opulence and 
prosperity, operates in a manner prejudicial to both. Allowing 
that this introduction of new arts and manufactures from 
foreign states is, in itself, beneficial, in so much that he assigns 
it, as we have seen, as one of the causes of countries becoming 
wealthy and prosperous, — he maintains, that this particular 
mode of introducing them is necessarily injurious. We have 
then to inquire, if there are any other means by which, accord- 
ing to his principles, this acknowledged most beneficial result 
can be brought about. 

The violent operation of foreign wars or domestic disturb- 
ances, will scarce, I think, be said to be more advantageous 
methods of effecting this purpose, than the restrictions and 
bounties of the legislator. At all events such causes are con- 
tinually diminishing in their frequency and the vigor of their 
operations, and becoming more and more beyond the reach of 
our calculations. For spreading the useful arts from people 
to people, this element confessedly of very great importance in 
the advance of the general welfare of mankind, there remains 
then, according to these principles, but the unaided efforts of 
private individuals alone. 

It must be kept in mind, that, by the efforts of individuals, 



ADAM SMITH ON FREE TRADE 417 

are meant, according to our author, their endeavors to better 
their condition ; that is, as he defines it, to increase their for- 
tunes. But, in order to add to his fortune, one must get more 
than he gives. No such efforts can ever lead any individual 
to embark in a project that will probably take more from him, 
than it will return to him. Now, to transfer a manufacture 
from one country to another, must always be a very tedious 
and expensive operation, for any individual to perform. The 
consideration of his own profit, the sole motive according to 
our author, which determines the owner of a capital to employ 
it in any undertaking, would never lead one, to engage in the 
enterprise of establishing a new manufacture in any country 
unless of such commodities as were of common consumption in 
it, and which he could therefore be sure to sell. Those com- 
modities being of common consumption, and not produced 
within the country, must at the time be furnished by some 
foreign state, and, consequently, to procure their sale, he must 
be able to supply them, at as cheap a rate as that state. The 
effecting this, for reasons I have stated, would generally take 
more time and money, than any private individual can afford. 
But, granting that the funds of some private individuals could 
afford this requisite outlay, and that they should succeed in 
bringing the manufacture to such perfection as to enable them 
to sell the commodity on terms equal to those of the foreign 
merchant, or lower than his, the more difficult question is, 
how is this great outlay to be reimbursed ? A great part of 
an individual's capital has been expended. This expenditure 
can, evidently, be reimbursed to him only by his drawing pro- 
portionally larger profits, than he otherwise could, from what 
remains. To balance the extraordinary outlay, he must have 
extraordinary returns. 

But profits far exceeding the usual rate of profit can scarcely 
ever be drawn, for any time, from any employment. " If, in 
the same neighborhood, there was any employment evidently 
more advantageous than the rest, so many people would crowd 
into it, that its advantages would soon return into the level of 
other employments."^ It is no doubt true, that the proprietor 
of such new manufacture might, sometimes, not only succeed 

1 Wealth of Nations, B. I. c. X. 
2d 



418 APPENDIX 

in establishing it, but in keeping secret the great profits he 
made from it, for a considerabU> period. This is a piece of 
good fortune, however, which, though it might sometimes befall 
an individual, he could never beforehand fairly calculate on. 
It is much more probable that his success would be blazoned 
abroad and exaggei'ated, that several projectors would establish 
themselves beside him, and, by bribing his workmen with 
somewhat higlier wages, with comparative ease, succeed in de- 
priving him of the profits he might otherwise have drawn from 
his extraordinary outlay of labor and capital.^ It may, there- 
fore, I think, be safely laid down as a principle, that, in all 
ordinary cases, a due reganl to their own interests cannot be a 
motive suthcient to prompt individuals to such undertakings. 
It may no doubt happen, as capitalists are every now and thou 
engaging in injudicious projects, and such as either injui-e or 
ruin them, that some one may be imprudent enough to enter 
on such a project as this, and may succeed in introducing a 
particular manufacture, though with the loss of part, or of the 
whole of his capital. But, even granting that such an occur- 
rence as this may sometimes take place, it wmild be far from 
serving to help out the theory we are discussing. '' Every 
injudicious and unsuccessful project in agriculture, mines, 
tisheries, trade, or manufactures, tends to diminish the funds 
destined for the maintenance of productive labor. In every 
such project, though the capital is consumed by productive 
hands only, yet, as by the injudicious manner they are em- 
ployed, they do not produce the full value of their consump- 
tion, there must always be some diminution in what would 
otherwise have been the productive funds ot" the society.""' 
Tliis project then, being injudicious and unsuccessful, for it 
would have occasioned the loss of a portion of individual 
capital, must, by these principles, be injurious to the society. 
If it be said by any supporter of these doctrines, that this 

'This aooounts for a remark of our author : "The uudertiiker of a great 
manufactory is sometimes ahvrmed if another work of the same kiml is estah- 
lislied within twenty miles of him. The Dutch undertaker of the woollen 
manufacture at Abbeville, stipulated, that no work of the same kind should 
be establislied witliin thirty leagues of that city." 

^ Wealth of Nations, 1\ II. c. 111. p. l.U. 



ADAM SMITH ON FREE TJIADE 419 

is too strict and constrained an interpretation of them, and 
that the loss which the society sustains, by the destruction of 
the capital of the original introducer of the manufacture, must 
be allowed to be made up by the gain which it receives from 
the profits made by those who afterwards engage in it;^ I 
reply, that I perfectly agree with him in his conclusions. I 
too think, that the small present expenditure of the funds of 
the society which the project may occasion, may be more than 
repaid, by the large future revenue that it will bring in. The 
only difference between us is, that the doctrines he advocates, 
teach us to wait, till the miscalculations of some unfortunate 
projector confer on us a public benefit, whereas, I hold, that it 
would be more just and judicious that the necessary first cost 
of the scheme should be borne by the whole community ; 
more just, as thus the burden necessary to be borne to procure 
a common benefit will be divided amongst all, instead of being 
sustained by one ; more judicious, as the society will not have 
to wait, for the attainment of a desirable object, on so doubtful 
a chance as the folly of projectors. 

It may also happen, that an individual, by some rare con- 
currence of accidents, may become initiated into all the secrets 
of some foreign manufacture, and, by some equally rare and 
happy union of good fortune and ingenuity, may succeed in 
introducing it into his own country with profit to himself. To 
wait, however, for this, or any such like lucky chance, or 
.singularly fortunate concurrence of circumstances, while better 
could be done, would be like waiting till the natural actions 
of the winds and tides should, by some strangely propitious 
concurrence of events, cast upon our shores a valuable plant 
or seed, that we might directly procure for the mere trouble 
and expense of sending for it. 

There are, also, motives of another class, capable, no doubt, 
of leading even individuals into such undertakings, and of 
carrying them successfully through them. The love of 
country or fame, or the desire to gratify personal vanity, 

* " The landlord can afford to try experiments and is generally disposed to 
do so. His unsuccessful experiments occasion only a moderate loss to him- 
self. His successful ones contribute to the improvement and Vjetter cultiva- 
tion of the whole country." B. V. c. II. 



420 APPENDIX 

are powerful motives of human action, and may sometimes 
even be directed into such channels as this. But as the 
tendency of such motives to promote the growth of national 
wealth is opposed to the principles of our author, and is 
expressly denied by him, we need not here enter into any 
inquiry concerning them. 

There is, however, one case, in which it cannot be denied, 
that the efforts of individuals to promote their own interests 
may be sufficient to introduce a new manufacture. If, in the 
progress of events, the requisites for a foreign manufacture 
come to be produced in so great abundance, and with so much 
facility, in any country, that a projector there finds that he 
can from the first afford to manufacture the commodity, and 
sell it at as low a rate as the foreign merchant, a due" regard 
to self-interest will certainly direct a portion of the national 
capital into that employment. But, a case of the circum- 
stances of a country being so peculiarly favorable to the 
practice of a foreign art, that, in the very first essays it 
makes in it, it can successfully compete with another, 
where that art has been long established, is assuredly very 
rare ; and, if any such case occur, we may be satisfied that the 
manufacture might, with much advantage, have been previ- 
ously introduced. 

In a passage already quoted, it is observed, that, " when a 
taste for foreign manufactures becomes general, the merchants, 
in order to save the expense of carriage, naturally endeavor to 
establish some manufacture of the same kind in their own 
country." These expressions are somewhat too loose to co- 
incide with our author's theory. It cannot be to save the 
expense of carriage, but to add to his own riches, that a mer- 
chant will endeavor to do any such thing. The consummation 
of such a measure, by saving a considerable expense to the 
community, might indeed add largely to the means of increas- 
ing their wealth in possession of all the merchants, or rather of 
all the members of the society ; but " it is his own advantage, 
and not that of the society, which every member of it has in 
view ; " and, in this system of perfect liberty and freedom from 
restraint, which is asserted to be the true plan of carrying the 
general prosperity of the community to the highest pitch, the 



ADAM SMITH ON FREE TRADE 421 

difficulty is, to discover a method of inducing an individual to 
incur an unavoidable outlay, the returns from which, although 
very benelicial to the whole society, are no more so to him who 
lays out a great deal, than to others who lay out nothing. 
Union is said to give strength. But union cannot exist unless 
there be a bond to unite, and this bond must confine and 
restrain. The rods to make a bundle were tied together. 
Men are tied by law, a bond binding all to pursue the 
course supposed to conduce most to the general happi- 
ness. This bond, though restraining individual freedom of 
action, and preventing individuals from pursuing the course 
which they might find most conducive to their own private 
happiness, has not, on the whole, been esteemed to have 
slightly promoted the great end for which it exists, the general 
wellbeing of mankind. We seek to rectify its errors, not 
to abolish it. The peculiarity of this system, relating to this 
particular part of the field of human action, is, that it main- 
tains that man cannot in it, as elsewhere, unite, so as to attain 
a common good. That, on the contrary, when they so unite, 
instead of attaining a common good, they necessarily burden 
themselves with a common evil. It aims, not to remedy any 
errors committed in adjusting the bond, but, to cut it asunder 
and cast it away. It is called a system of complete freedom 
from restraint and perfect liberty. These terms, when looked 
at nearly, will be found to mean a dissolution of all bonds and 
total isolation of interests. Hence, in this particular case, 
where an end is to be gained, the attainment of which it is 
admitted would be beneficial to all, it is yet maintained that it 
is impossible for all to bring it to pass without hurting 
instead of benefiting themselves. 

It is impossible to shut the eyes to the fact, that the intro- 
duction of an art into any country, enabling the labor of 
its inhabitants at once to transmute the products, which 
nature, in conjunction with their own industry, procures for 
them, into the commodities their wants demand, instead of 
sending them to a distance to other people to effect that 
change, is a great good to all, were it only for the mere saving 
of transport thus effected ; but it is maintained, that it is im- 
possible for all the members of the community advantageously 



422 APPENDIX 

to unite in bringing about this common benefit. It is clearly 
seen, that a new channel might be opened from the exhaustless 
river of human power, springing from the mingled sources of 
nature and art ; and that, if so, a plenteous stream would flow 
in on the community, drawing from which individuals might 
add largely to the general opulence. But some means must be 
employed to open it up. There is an obstruction in the way 
that must previously be overcome ; a rock blocking it up that 
must be removed. No individual will open up the channel, 
because, were he so to do, he could derive no more benefit 
from the labor than others who had not labored. The whole 
society, or rather the legislator, the power acting for the whole 
society, might do so, and in similar cases has done so, and, to 
judge of the measure by the events consequent on it, with the 
happiest success. Why, then, should he not ? 

The arguments advanced by the author of the Wealth of 
JVatio7is, to prove that the legislator ought never to lend 
his aid to effect such a purpose, are chiefly contained in 
the second chapter of the fourth book. They will be found to 
rest almost altogether on the assumption, that national and 
individual capital increase in precisely the same manner. 
This notion, I flatter myself I have shown, cannot, by any 
means, be taken as a self-evident principle, or one so firmly 
established as to serve as the basis of an important practical 
doctrine. But, even admitting that the two processes are 
similar, the [theoretical] arguments of Adam Smith would not 
altogether bear out his conclusions. 

It is, he says, and the sentiment serves for a motto, and 
forms, indeed, the substance of two volumes that have contri- 
buted greatly to spread his doctrines over Europe, " It is the 
maxim of every prudent master of a family, never to attempt 
to make at home what it will cost him more to make than to 
buy. The tailor does not attempt to make his own shoes, but 
buys them of the shoemaker. The shoemaker does not attenipt 
to make his own clothes, but employs a tailor. The farmer 
attempts to make neither the one nor the other, but employs 
those different artificers. All of them find it for their interest 
to employ their whole industry in a way in which they have 



ADAM SMITH ON FREE TRADE 423 

some advantage over their neighbors, and to purchase with 
a part of its produce, or, what is the sapie thing, with the 
price of a part of it, whatever else they have occasion for. 
What is prudence in the conduct of every private family can 
scarce be folly in that of a great kingdom." 

To make the fanciful parallel here assumed as complete, in f 
any sense just, it would be necessary to place the tailor at a 
hundred miles distance from the shoemaker. Were he at this 
distance, and did he find that the expense of getting a pair of 
shoes carried so far was considerable, perhaps exceeding their 
first cost, he might find it good economy even to make them 
himself. To be sure, the procuring the requisite tools and the ^ 
learning their use, would render the making of the first few 
pairs much more expensive than the purchasing of them would 
have been. But this necessary dearness of the first articles 
produced might be compensated by the cheapness of those pro- 
duced subsequently. In the same way, though a farmer, if the 
tailor and shoemaker were near at hand, would do wisely 
to employ them, yet, if they were at a great distance, he 
might possibly with advantage dispense with their services, 
and set some of his family to make clothes and shoes for 
the rest. A farmer, indeed, would have peculiar inducements 
to practise some trades, those, namely, for which he supplied 
the raw materials, as by doing so he would be saved the 
carriage, both of the articles made, and of the stuff for making 
them. It is thus, that, in fact, in most countries where 
the population is scattered and the internal communications 
are bad, many trades are practised in the farmers' houses and 
by their own families. In this way it is that, in very many of 
the recently settled parts of North America, every operation 
that the wool undergoes, from the taking off the fleece to the 
cutting and making up the cloth, is performed in the farmer's 
house and by his own family. A similar state of things 
caused a similar practice to prevail in England a century ago, 
and, at present, keeps up many of those manufactures which 
are properly termed domestic, in many other parts of Europe. 
In Canada it is not uncommon for the farmer to have, not only 
the whole processes that wool undergoes till it come to be 
worn, carried on by the members of his own family, but also to 



424 APPENDIX 

get a great variety of other things made by them, which he 
could not procure otherwise unless by sending to an incon- 
venient distance. The mending of shoes, very generally, the 
making of them, not unfrec^uently, and sometimes even the 
manufacturing the leather, are in recent and remote settle- 
ments thus performed. The latter process, I may add, from 
various circumstances, but chietly from the use of the bark of 
a sort of pine peculiar to the country and in general very 
common, and which, unlike that of the oak, is very thick and 
easily collected, is much less expensive in Canada than in liritain. 

I knew two brothers whose farms or estates lay in one of the 
interior districts of that country, in tlie midst of its forests, and 
consequently at a considerable distance, perhaps twenty or 
thirty miles, from artiticers of any description. Having each 
of them large families and productive farms, they had occasion 
for the services of various artificers, and had the means of 
paying them. Nevertheless, they very rarely employed them ; 
almost every article they required was made by some one of 
the two families. As they were prudent and sagacious men, 
of which they produced the best evidence in the general success 
of their undertakings, and the prosperity of the settlement of 
which they were at the head, 1 think it likely, that in this also 
they had turned their means to the best account. In fact, as 
they who are familiar with the details of beginning settlements 
in North America will admit, by this plan they in a great 
measure obviated the two chief drawbacks on the prosperity of 
new and remote settlements, the excessive dearness of every 
article not produced there, from the great expense attending 
the transport of the raw produce and retransport of the manu- 
factured goods, and the serious inconvenience arising from the 
difficulty, in such situations, of supplying, when necessary, 
unforeseen but pressing wants. 

Among other things which they got made on their own 
farms, were boots, shoes, and leather. That they might get 
this done, they were at the pains and expense of sending one of 
the young men to some distance, to make himself sufficiently 
master of those trades for their purpose. They thougiit, how- 
ever, that the cost they were thus put to was repaid, thrice 
over, by the saving of time and expense which it effected for 



ADAM SMITH ON FREE TRADE 425 

them, in enaljling them to make, out of leather which cost 
them very little, numerous articles that they must otherwise 
have been constantly sending for, to a great distance by roads 
that were almost impracticable a great part of the year. I 
do not know whether in this their conduct was judicious or 
otherwise, but, it is very certain, that however apparently 
prudent the measure may have been, and however great the 
saving effected by it might have been, it was completely con- 
trary to our author's doctrines, and might easily be shown by 
them to have been necessarily and inevitably injurious. 

We may suppose that, just at the time when these two 
legislators of this little community had come to the determina- 
tion of taking means to dispense with the services of the distant 
tanner and shoemaker, they were addressed on this subject by 
a philosopher of this school. His reasonings would doubtless 
have been in the following strain. " You are assuredly wrong 
in the plan you are going to adopt, for it proceeds upon very 
erroneous and illiberal principles, as I can easily show you. 
You are in want, you say, of some pairs of shoes, surely then 
it is best for you to purchase them where you can get them 
cheapest. But, by the plan you are taking of going to a great 
expense to have them made at home, they will certainly cost 
you more when made there, than if bought at the place where 
you have hitherto purchased shoes. And, if that place can still 
supply you with this commodity cheaper than you yourself can 
make it, better buy it there with some part of the produce of 
your own industry. The general industry of your settlement 
must always be in proportion to the capital which employs it, 
and will not be diminished by being left to be employed in a 
way in which you have some advantage. By forcing it to 
produce an object which it can buy cheaper than it can make, 
it certaiidy is not employed to the greatest advantage. Let 
things therefore take their natural course, and shoes will be 
made at your doors when it is fit for them to be made there." 

To these reasonings our legislators might possibly reply, 
" We confess that the first pairs of shoes that we get, will cost 
us much more, thus made at home, than they would do were 
we to buy them abroad. But then it will only be for the first 
articles manufactured that we shall pay so high, in the end 



426 APPENDIX 

they will come cheaper to us at home than from abroad ; and 
it is to effect this desirable result, that we are going to under- 
take the project. We don't understand very well what you 
mean by the natural course of affairs, but we think the sooner 
we can get them to take a course, that will before long make 
things cheaper to us, the better." The answer to this in the 
words of our author would be : "I don't at all dispute, that, 
by means of this project, this particular manufacture may be 
acquired sooner than it could be otherwise, and after a certain 
time, may be made at home as cheap, or cheaper, than abroad. 
But, though the industry of your society may be thus carried 
with advantage into a particular channel sooner than it could 
have been otherwise, it will by no means follow that the sum 
total, either of its industry, or its revenue, can ever be 
augmented by any such project. The industry of your society 
can augment only in proportion as its capital augments, and its 
capital can augment only in proportion to what can be saved 
out of its revenue. But the immediate efiect of this project of 
yours is to diminish its revenue ; and what diminishes its 
revenue is certainly not very likely to augment its capital 
faster than it would augment, were you to leave capital and 
industry to find their natural employments." 

Our legislators might still possibly answer. " As far as we 
can comprehend your arguments they reduce themselves to this. 
We have to give out what is a considerable sum to us, before 
we can carry this project into effect, and, for this outlay, you 
think we shall get no adequate return. Now in this our 
opinion differs from yours. We know indeed that we must 
expend something, but we think that in the long run we shall 
be better repaid for this expenditure, by this undertaking, than 
by any other in which we could employ our funds. We never 
yet got any thing without giving something for it, and, although 
we in this instance give money or money's worth, and get 
chiefly knowledge and skill in return, yet if you will take the 
trouble of examining the calculations we have been making of 
the saving which we shall in a few years efl'ect, chiefly by 
means of this knowledge and skill, on what we annually pay 
for shoes and boots, we think you will agree with us that we 
shall gather in three times what we gave out." 



ADAM SMITH ON FREE TRADE 427 

" No, no," our philosopher would exclaim, " this is quite un- 
necessary, I see now how the case stands. I perceive you have 
got a theory as well as I have. But your theory is that of 
practical men who reason upon facts, whereas my theory is 
built upon general axioms. Now there is this great difference 
between two such theories, that when they are opposed to each 
other the latter, such as mine must always be right, the former 
such as yours, wrong. My main axiom on which is founded a 
great system is, that capital always augments by accumulation. 
This you perceive is a general axiom, and however it may be 
that there may be apparent exceptions to it, yet as it is a 
general axiom, it is a philosophical consequence that these ex- 
ceptions can only be apparent. Your theory is opposed to this 
axiom of mine, for you pretend to say that capital may be aug- 
mented by other means than simple accumulation, and very 
strangely assert that, after giving it out of your hands, you will 
get it replaced to you, with large profit, out of the skill and 
knowledge which the outlay has procured you. But, as in 
proof of this you bring me only facts and figures, you will see 
of course that it is quite unnecessary for me to notice such 
arguments ; for, however plainly it might from them appear 
that your scheme is practicable and must ultimately liberally 
repay your advances, yet, this conclusion being proved by 
reasoning, is a theory, and that theory having the disadvantage 
of not being drawn like mine from general axioms, and being 
merely a laborious deduction from particular observations, it 
must of necessity follow from indubitable philosophical prin- 
ciples, that it is wrong, and mine right. The case being so, 
you are, I hope, men of too good sense to dispute the matter 
farther. Should you however persevere I must take the 
liberty of telling you that you are too narrow-minded theorists, 
and that, by interfering, in the manner you are about to 
do, with the natural course of events, you will infallibly 
waste the resources of your infant community, and retard its 
prosperity." 

I apprehend such philosophic arguments would not have 
had much success with them or other men of practice, and 
that, even should we take the procedure adopted by in- 
dividuals, as a fit model for that of nations, we would not find 



428 APPENDIX 

that it altogether agreed with the rules which the doctrines of 
Adam Smith inculcate. The reason is, that individuals, as well 
as nations, acquire wealth from other sources than mere saving 
from revenue ; that skill is as necessary, and consequently as 
valuable, a cooperator with the industry of both, as either 
capital or parsimony ; and that therefore the expenditure 
which either may be called on to make to attain the requisite 
skill, is very well bestowed. 

But, though skill is valuable both to nations and to in- 
dividuals, there are many circumstances that render it more so 
to the former, than to the latter. In the first place, it is more 
durable. Whatever may be the perfection to which an in- 
dividual may have brought his skill, dexterity, and judgment, in 
conducting any particular set of operations, that perfection 
perishes with him. Whatever expense it may have cost him to 
acquire this possession, and however valuable it may be to him- 
self, he cannot transmit it to his heirs. But any addition which 
a society makes, to the skill, dexterity, and judgment, with 
which its members exercise any branch of industry, is not of this 
fleeting nature. Instead of the benefits derived from it, being 
bounded by the short space of time that the active life of an 
individual embraces, they are continuous with the national 
existence. If it be worth while paying a considerable 
apprentice-fee, for the acquisition of an art, which can probably 
only be exercised for twenty or thirty years, it must be 
better worth while to pay for one, the advantages derived 
from the possession of which, may be retained for hundreds or 
thousands of years. 

Again, whatever an individual may expend in acquiring any 
degree of skill is, to a certain extent, lost to him ; though he 
may draw a revenue, he cannot draw a capital from it. No 
portion of the future skilled labor of an individual can be sold, 
because it can only be sold with himself, and such bargains, 
sanctioned in ancient, are not so in modern times. Nowhere 
can one effectually make over his services for a certain time to 
any other person, because, nowhere can he give that person 
the power of enforcing their exertion. On the contrary, any 
portion of the future revenue, yielded by the skilled industry 
of a nation, may be sold, and, consequently an addition to the 



ADAM SMITH ON FREE TRADE 429 

national skill gives a proportional addition to the command of 
national resources, to meet any sudden emergency. The pro- 
duce of the general industry of Great Britain, stands mortgaged 
for a sum, which it would have appeared a century ago utterly 
impossible to conceive that industry could sustain, because, a 
century ago, it was impossible to conceive the vast increase 
which has since been made to the skill, dexterity, and judg- 
ment, with which it was then directed. 

Besides these and other differences between the effects 
resulting from the acquisition of skill in the pursuits of in- 
dustry by nations, and by individuals, there is one on which I 
have already enlarged. An increase of skill seems to be always 
a necessary concomitant of the increase of national wealth, 
whereas it is not always a concomitant of the increase of in- 
dividual wealth. It is not therefore true, that nations and 
individuals increase their wealth in the same manner, nor, were 
it so, do the rules, which modern political economists lay down 
for the increase of national wealth, agree with those which 
individuals adopt in their endeavours to augment their private 
stocks. 

The main arguments, however, which the author brings for- 
ward, are built on what he assumes to be general principles. 
The doctrine he maintains throughout his whole system, and 
more particularly in the chapter to which I have alluded, turns 
on the following passage. 

" If a foreign country can supply us with a commodity 
cheaper than we ourselves can make it, better buy it af them 
with some part of the produce of our own industry, employed 
in a way in which we have some advantage. The general in- 
dustry of the country being always in proportion to the capital 
which employs it, will not thereby be diminished, no more than 
the capital of an artificer is diminished who purchases an 
article from another practising a different art instead of making 
it himself. It will only be left to find out the way in which 
it can be employed with the greatest advantage. It is certainly 
not employed to the greatest advantage, when it is thus 
directed towards an object which it can buy cheaper than it 
can make. The value of its annual produce is certainly more 
or less diminished, when it is thus turned away from producing 



430 APPENDIX 

commodities evidently of more value than the commodity 
which it is directed to produce. According to the supposition, 
that commodity could be purchased from foreign countries 
cheaper than it can be made at home ; it could therefore have 
been purchased with a part only of the commodities, or, what 
is the same thing, with a part only of the price of the com- 
modities, which the industry employed by an equal capital 
would have produced at home, had it been left to follow its 
natural course. The industry of the country, therefore, is thus 
turned away from a more to a less advantageous employment ; 
and the exchangable value of its annual produce, instead of 
being increased, according to the intention of the law-giver, 
must necessarily be diminished by every such regulation. 

" By means of such regulations, indeed, a particular manu- 
facture may sometimes be acquired sooner than it could have 
been otherwise, and after a certain time may be made at home 
as cheap, or cheaper, than in the foreign country. But though 
the industry of the society may be thus carried with advantage 
into a particular channel sooner than it could have been other- 
wise, it will by no means follow that the sum total either of its 
industry or of its revenue, can ever be augmented by any such 
regulation. The industry of the society can augment only in 
proportion as its capital augments, and its capital can augment 
only in proportion to what can be gradually saved out of its 
revenue. But the immediate effect of every such regulation is 
to diminish its revenue ; and what diminishes its revenue is 
certainly not very likely to augment its capital faster than it 
would have augmented of its own accord, had both capital and 
industry been left to find out their natural employments. 

" Though, for want of such regulations, the society should 
nt^ver acquire the proposed manufacture, it would not upon that 
account necessarily be the poorer in any one period of its dura- 
tion. In every period of its duration its whole capital and 
industry might still have been employed, though upon different 
objects, in the manner that was most advantageous at the time. 
In every period its revenue might have been the greatest which 
its capital could afford, and both capital and revenue might 
have been augmented with the greatest possible rapidity. 

" The natural advantages which one country has over another, 



ADAM SMITH ON FREE TRADE 431 

in producing particular commodities, are sometimes so great 
that it is acknowledged by all the world to be in vain to 
struggle with them. By means of glasses, hot-beds, and hot- 
walls, very good grapes can be raised in Scotland and very 
good wine, too, can be made of them, at about thirty times the 
expense for which at least equally good can be brought from 
foreign countries. Would it be a reasonable law to prohibit 
the importation of all foreign wines, merely to encourage the 
making of claret and burgundy in Scotland ? But if there 
would be a manifest absurdity in turning towards any employ- 
ment thirty times more of the capital and industry of the 
country than would be necessary to purchase from foreign 
countries an equal quantity of the commodities wanted, there 
must be an absurdity, though not altogether so glaring, yet 
exactly of the same kind, in turning towards any such employ- 
ment a thirtieth, or even a three hundredth part of either. 
Whether the advantages which one country has over another 
be natural or acquired, is in this respect of no consequence. 
As long as the one country has those advantages and the other 
wants them, it will always be more advantageous for the latter 
rather to buy of the former than to make. It is an acquired 
advantage only, which one artificer has over his neighbor who 
exercises another trade ; and yet they both find it more advan- 
tageous to buy of one another, than to make what does not 
belong to their particular trades." 

I must be excused for running somewhat into repetition 
in observing, that the strength of this passage evidently lies 
in the axioms, " The industry of the society can augment only 
as its capital augments, and its capital can augment only in 
proportion to what can be gradually saved out of its revenue ; " 
and that the proper answer to these axioms is, either, that 
they prove nothing, or, that they prove it by a begging of 
the question, by assuming that to be proved which is in 
process of proof. The expression, the industry of the society 
can augment only as its capital augments, may signify, either, 
that the augmentation of a society's capital, and an increase of 
its productive industry always accompany each other ; or, that 
every augmentation of the productiveness of the general in- 
dustry, is produced by an augmentation of capital, and can 



432 APPENDIX 

be produced by nothing else. In like manner, the expres- 
sion, the capital of the society can augment only in propor- 
tion to what can be gradually saved out of its revenue, may 
signify, either, merely that the saving from revenue is a 
necessary part of the increase of the general capital, and 
measures its amount, or, that there are no other means of 
augmenting its capital but it. In the former of these two 
senses the axioms prove nothing ; in the latter they prove 
all things desired, because they assume them as acknowledged 
truths. The double meaning of the assumptions contained 
in these axioms, and the fallacy into which they may, in 
consequence, be made to lead, may be easily perceived by an 
application of them to the transactions of an individual. 

A person residing in England, owns an estate in the West 
Indies, which he proposes to visit. His motives to do so 
are, that he thinks, that, by his personal superintendence, 
he can give a better direction to the industry employed on 
it, and render the returns greater. In order to do so, it is 
necessary for him to procure and expend a certain sum to 
pay for the expense of the voyage, and the cost of the various 
articles which his private accommodation will require there ; 
and he therefore takes measures to apply to this purpose a 
considerable part of one year's revenue of the estate. On 
account of this disbursement, some one objects to the project, 
and endeavors, in the following manner, to prove to him that 
it must be hurtful to his interests : 

" The augmented productiveness of your estate, and the 
increased amount of capital at which it will be estimated, 
must go on together. But, to add to capital, it is neces- 
sary to save from revenue. Now the scheme you are about 
to embark in requires first a large expenditure of revenue. 
It must therefore tend to prevent your augmenting your 
capital, and consequently the productive industry of your 
estate, which two things always go on together." The answer 
to this reasoning would be : " It is chiefly because I am aware 
that the productiveness of my estate, and what it is worth, 
are inseparably conjoined, that I am about to be at this 
expense and trouble, for I believe they will enable, me to 
put things in such a train that its productiveness will greatly 



ADAM SMITH ON FREE TRADE 433 

increase, and, as its value I know depends on the revenue 
it yields, my capital will consequently be augmented by much 
more than the sum I am going to expend." 

" I perceive I have not expressed my meaning properly," ■ 
replies the adviser, " I should have said ; an increased produc- 
tiveness of your estate, can be produced by no other means 
than by an augmentation of the capital employed on it, and 
the amount of capital you can possess and can employ on it, 
can be augmented in no other way than by saving from your 
revenue. But this plan of yours causes an expenditure of 
your revenue, it must therefore prevent you from adding to 
your capital, and, consequently, from increasing the productive- 
ness of the industry which is set in motion by it on your estate." 
The West India proprietor might undoubtedly reply : " My 
dear Sir you are completely wrong. The productiveness of 
my estate depends, not only on the amount of the capital which 
sets the industry employed on it in motion, but on the sort 
of motion it gives it ; and I hope so to improve this, by 
a more judicious regulation of it, that the same power will 
produce a far greater effect than it does at present, and thus 
to show you, that there are other means of augmenting 
capital than simple saving. For I take it, that if I add to 
my gains, without increasing my expenditure, the procedure 
may be just as effective to this end, as if I were to diminish 
my expenditure, and not add to my gains." 

If we understand the axioms of our author in the former 
sense of the expressions, it is clear, that when applied to 
national capital, they prove nothing more than when applied 
to individual capital. For, if it be merely meant that the 
productiveness of national industry, and the augmentation 
of national capital advance together, the propriety of a pro- 
posed measure may as well be inferred from its tendency 
to render the industry of the community more productive, 
as its impropriety may be inferred from its requiring a small 
immediate expenditure of revenue. The question to be deter- 
mined in every such case, would then be similar to that 
which an individual determines when deliberating on any 
scheme for the augmentation of his private capital, and would 
resolve itself into an inquiry, whether or not the probable 

2 E 



434 APPENDIX 

returns from the proposed measure, be likely to be a sufficient 
remuneration for the expense of carrying it into effect. But, 
it is very clear, that this would be a constrained interpretation 
of the import of the passage ; and that the inference the author 
wished his expressions to convey, is, that an increased produc- 
tiveness of the industry of the society can be produced by no 
other means but by augmenting its capital, and that the only 
means entering into the process of augmenting its capital are 
saving from its revenue. 

The proper answer to these axioms, so understood, is, — this 
is your theory no doubt, but it is a theory which is merely 
in process of proof, and not yet established. Surely, then, 
it is scarce logical to answer a very obvious objection to it, 
which the observation of human aflairs presents, by assuming 
its truth ; or, to deduce the impropriety of a practical mea- 
sure, drawn from the phenomena which human affairs present, 
and apparently very beneficial, by showing that such measure 
is contrary to its principles. 

The question hitherto stands thus. You pretend to account 
for the phenomena of the augmentation of national wealth 
by showing, that an increase of national capital tends to 
facilitate the division of labor ; that this division of labor in 
itself greatly improves the productive powers of labor, and 
is the cause of all other improvements in them. That this 
increase of the productive powers of labor, being equivalent 
to an increase of the revenue of the society, adds to its 
power of accumulating fresh capital and giving farther extent 
to the division of labor, the great generator, according to 
your system, of all wealth. It is in this way that, according 
to you, the augmentation of the industry of the society is 
produced by an augmentation of its capital, and in no other 
manner, and its capital is augmented by saving from revenue 
and nothing else, and that, from the action and reaction of 
these principles on each other, the whole phenomena of the 
growth of national capital are deducible. 

Now, admitting for the present that no fallacy can be 
detected in the principles themselves, they must still be 
admitted to be only possible or probable theoretical assump- 
tions, to be proved by the observation of their coincidence 



ADAM SMITH ON FREE TRADE 435 

with facts. Admitting then also that, as far as the facts 
which relate to what we may call the history of the internal 
progress of national wealth are concerned, they sufficiently 
accord with them, there is another class of facts admitted 
by you, which these principles do not explain, and to which, 
on the contrary, they seem to be opposed. 

Arts and manufactures, the great sources of increase to 
the productive powers of labor, do, it is granted, pass from 
country to country. It would appear then, that the gradual 
increase which the accumulation of capital produces on the 
productive powers of any society, is not alone sufficient to 
call forth all the resources which that society possesses ; but 
that it is often necessary to seek in other countries for the 
means, which give these resources full efficiency. In such 
cases, at least, therefore, the augmented wealth of the society 
cannot be said altogether to flow from the gradual increase 
of its capital by accumulation, the consequent division of labor, 
and the improvements thence resulting. Your theory is, 
therefore, so far most certainly defective, as it acknowledges 
the existence of a class of phenomena, the laws regulating 
which its principles by no means explain. 

Instead, however, of attempting to answer the objections 
to your system, which this class of phenomena present, you 
pretend to say, that the practical rules directly, and in the 
simplest manner, deducible from them, are of necessity 
erroneous, because contrary to the principles of your system. 
It being acknowledged by every one, even by yourself, that 
the improvements of the productive powers of labor thus 
effected by the continued spread of the arts of civilized life 
from country to country, are among the chief causes of the 
progress of national wealth and prosperity, they who have 
had the management of national affairs, have in different 
cases come to the unavoidable conclusion, that they did well 
in even sacrificing a small portion of the national revenue, 
provided this outlay served to introduce acknowledged im- 
provement in the national industry, and source of national 
wealth. They have acted in this as an individual would do 
in the management of his private affairs, they have endea- 
vored to introduce an improvement into the management of 



436 APPENDIX 

the funds with which they were intrusted, and have con- 
sidered the price to be paid for such improvement war- 
ranted by the increased productive powers it would give to 
the same capital, and consequent increase to the national 
revenue, and national funds, which it would tend to pro- 
duce. Like individual schemes their projects seem sometimes 
to have succeeded, and sometimes to have failed. But 
though, when he acts, it is incident to man's imperfect 
nature occasionally to err, to sit down therefore in resolute 
inactivity would be the worst error he could commit. 

The celebrated author admits, that a manufacture may be 
introduced by the operations of the legislator, sooner than it 
could otherwise be, and thus come to be made at home as 
cheap, or cheaper, than abroad. But then, he says, in spite 
of these apparent advantages of such a proceeding on his part, 
it must be wrong, because it is contrary to my system. And, 
before you can prove that it is justifiable, you must prove that 
the benefits resulting from it could not possibly have happened 
some other way. " Though, for want of such regulations, the 
society should never acquire the proposed manufacture, it 
would not upon that account necessarily be the poorer in any 
one period of its duration. In every period of its duration, 
its whole capital and industry might still have been employed, 
though upon different objects, in the manner that was most 
advantageous at the time. In every period its revenue might 
have been the greatest which its capital could afford, and both 
capital and revenue might have been augmented with the 
greatest possible rapidity." 

Now, I conceive, that instead of calling on his opponents to 
prove, that all the advantages arising from any such scheme 
might possibly come to pass without it, he himself has to 
show, that they must come to pass without it. And, that he 
has to do so, not by assuming his theoretical principles as true, 
— for, if they are so, his axioms embrace and decide this and 
every case at once, — but by an examination of the course of 
human affairs, and a regular deduction from them, of the cer- 
tainty of these apparent advantages, or others equivalent to 
them, flowing in from some other channel than that of which 
he would bar the opening. 



ADAM SMITH ON FREE TRADE 437 

A nation imports from a distance a manufactured com- 
modity, which it is granted it could make as cheap, or cheaper, 
at home, were the manufacture introduced there. To introduce 
the manufacture is, however, too expensive a project to be 
carried into effect by any private individual. The whole 
society might do so, through the expenditure for a few years 
of a portion of its revenue, much less than what an equal 
number of years succeeding them will return to it in the 
diminished cost of the article. He, or they, who legislate for 
the society, embrace the apparent benefit, and, by means of a 
small expenditure, effect an increase of the productive powers 
of the community ; that is, they give those powers the capa- 
bility of producing the same quantity of an article with less 
expense, which certainly must be allowed to be an increase of 
them. In this the legislator acts in a manner that would be 
accounted prudence in a private person, who conducted any 
system of industry for his own emolument : in a planter, for 
instance, who owned and managed a West India estate. We 
should undoubtedly approve of such a person's being at con- 
siderable expense, in instructing his overseers and negroes, in 
any improved mode of conducting the business of the planta- 
tion, if this improvement more than proportionably augmented 
his revenue. Neither have the proceedings of legislators, in 
many cases parallel in principle to this, been ever objected to. 
It sometimes happens, for instance, that those engaged in cul- 
tivating the ground know that they can procure seeds of plants, 
or races of animals, at a distance, better fitted for their purposes 
than those they have at home. If the expense of procuring 
them is small, and such as will be remunerated to an individual 
by the gain, individuals send for such seeds and animals. If 
it is greater, they sometimes club in societies for the purpose. 
If it be too great for these societies, the legislator aids them in 
their scheme, or carries it into effect himself. In this way it 
was, that, it being thought that the culture of the bread fruit 
tree, a plant indigenous to the Pacific Ocean, could it be intro- 
duced into our West India Islands, would be of advantage to 
them, government were at the expense of sending more than 
one vessel, on that long voyage, in order to transport the plant 
there. No one did, or could object, to the outlay of a portion 



438 APPENDIX 

of the public revenue for a purpose so laudable. In this in- 
stance, it will be allowed by all, that it would have been as 
absurd to have waited in expectation that some individual 
should find, or should imagine he would find it for his own 
private advantage to undertake so expensive a scheme, as it 
would be to complain of the comparatively trifling expenditure 
of the common funds, which the accomplishment of this project 
conducive to the common good required. But the expenditure 
of a certain amount of national revenue, for the purpose of 
transporting an useful art from a distant country, bears, surely, 
a close analogy to a similar expenditure, for the purpose of 
transporting an useful plant.^ If the one be praiseworthy, the 
other can scarce deserve the censure that has been heaped 
on it. 

Our author further observes : " The natural advantages 
which one country has over another, in producing particular 
commodities are sometimes so great that it is acknowledged by 
all the world to be in vain to struggle with them." And, as 
an instance, he gives the project of raising grapes, for the 
purpose of raaking wine, in Scotland. 

Extreme cases are useful, but, to be so, they should be cor- 
rectly put. The main question in dispute is, whether or not 
it is proper to introduce a manufacture from abroad, by the 
aid of the legislator, which, when so introduced, will furnish a 
commodity for home consumption at as low, or at a lower 
price, than it can be bought for in the foreign country. The 
supposed case of a commodity which, if the manufacture of it 
be introduced at home, will cost thirty times more, or a 
thirtieth, or three hundredth part more there than abroad, can 
have nothing to do with the determination of such a question. 

" Whether the advantages which one country has over 
another be natural or acquired, is in this respect of no conse- 
quence." On the contrary, in my opinion, it is of the greatest 
consequence, and, for this very reason, that it is only " as long 
as the one country has those advantages, and the other wants 

^ [In the case of the promotion of an industry by means of protective duties 
On contrast to bounties), there is no "certain amount" of outlay of the 
resources of the people ; there is no book-keeping possible ; no one ever 
knows how much has been its cost.] 



ADAM SMITH ON FREE TRADE 439 

them, that it will more advantageous for the latter rather to 
buy of the former than to make." Now natural advantages 
cannot be procured by any expenditure of revenue or capital, 
but acquired advantages may often be got by means of a very 
small expenditure. One country cannot, at any purchase, 
acquire the soil, the climate, the commodiousness of situation 
for conducting trade, or any of the other natural advantages 
which another country possesses ; were it so, the price would 
be very large that would not be willingly paid for them. But 
one country can often with ease, and at a trifling expense, 
acquire the practical skill and the knowledge of particular arts 
and manufactures which another possesses, and, by doing so, 
gain the advantage of procuring for itself the products of this 
skill and knowledge at home, instead of having to go abroad 
for them. In the passage quoted, natural advantages and 
acquired are reckoned equivalents, and so undoubtedly they 
are. They are both valuable on account of the products they 
yield to human labor. But they differ in this, that the latter 
can be transferred from one country to another, the former 
cannot. Could Scotland acquire the sunny skies and more 
genial climate of France, its hills might be covered with vine- 
yards, instead of heather, and its inhabitants might procure 
many commodities at a fourth of the price which they now 
cost them. No one would object to a considerable expenditure 
to acquire so great an advantage. If then, the acquisition of 
natural advantages would be worth paying for, why object to 
a small expenditure to procure advantages which are allowed 
to be equivalent to those natural advantages ? 

As the author has given one supposed case, as he conceived 
illustrative of the question, I may be permitted to give another, 
also illustrative of it ; not like his, however, springing from 
assumptions liable to be objected to, but, as will be seen, 
framed upon his very principles and admissions. 

A certain country has the acquired advantage over another 
of possessing the knowledge of a particular art, which this 
other wants. The latter, therefore, imports from the former 
all the goods, the product of that art, which it has occasion 
for. As it has to pay for these goods, it luckily happens that 
it, on its side, has also acquired advantages in possessing the 



440 APPENDIX 

knowledge of another art, which the former wants, and the 
commodities produced by which it has occasion for. In this 
way, the one sort of goods pays for the other. The natural 
and acquired advantages of these two countries are either 
similar or equivalent. That is, their soil, climate, convenience 
of situation for trade, and their knowledge of other arts, though 
not exactly the same, are on the whole equally balanced, their 
population and capital are equal. In short, they as much 
resemble two neighbouring artificers, according to the com- 
parison of our author, exercising difterent trades, as extensive 
communities inhabiting separate countries well can resemble 
single workmen whose dwellings are contiguous. The peculiar 
manufacture of the one nation is hats, of the other silk goods. 
The silk goods which the one annually consumes cost it 
£2,000,000 ; the hats which the other consumes, the same 
sum. Of these sums 25 per cent, is made up of transport, 
including in the term, not the mere freight, but the whole 
charges paid for internal transport, for warehousing, and for 
the profits of the different capitals, and wages of the various 
individuals concerned in collecting the commodities in the one 
country, carrying them to, and distributing them over the 
other. Thus the annual sum which these commodities cost 
each country, over and above the [prime] expense of producing 
them, is £400,000. In this situation things have long re- 
mained, and must continue to remain, unless altered by some 
change in the policy, or great revolution in the affairs of the 
two countries. " It being only for the sake of profit that any 
man employs a capital in the support of industry," and, from 
the acquired advantages which each country enjoys over the 
other in the production of its peculiar manufacture, it being 
impossible for any projector to manufacture hats, in the 
country where hats have not hitherto been made, or silks, in 
the country where silks have not hitherto been made, but at 
an outlay of more than 25 per cent, over what they cost in 
the country where these respective manufactures are estab- 
lished, no such project will be entered on. The legislators of 
the two countries, have hitherto agreed with our author, that, 
as it is the maxim of every prudent master of a family, never 
to make at home what it will cost him more to make than to 



ADAM SMITH ON FREE TRADE 441 

buy ; what is prudence in the conduct of every private family 
can scarce be folly in that of a great kingdom ; and that, 
whether the advantages which one country has over another 
be natural or acquired, is of no consequence, it being an 
acquired advantage only, which one artificer has over his 
neighbor, who exercises another trade, though they both find 
it for their advantage, rather to buy of one another, than to 
make what does not belong to their peculiar trade Acting on 
these principles, they have thought it improper to make any 
alteration in the system. 

About this time, however, a change takes place in their 
opinions, and they begin to think, that as, though it would not 
be very prudent in the tailor, that he might have his shoes 
made in his own workshop instead of his neighbor's, to set 
about making them himself, or the shoemaker, for the same 
reason, to set about making his own coat, yet, if there were a 
town in which there were no shoemakers, but more than enough 
of tailors, and another, a dozen miles off, in which there were 
no tailors, but more than enough of shoemakers, it would be a 
beneficial change for some of the tailors to remove to the one 
town, and some of the shoemakers to the other, that the inhabi- 
tants of both might have the articles fabricated by these differ- 
ent sorts of tradesmen, made at home, that is, within their 
respective towns, — so, two countries, of which the one made no 
hats, and the other no silk goods, might mutually benefit by the 
introduction of the manufacture in which each was deficient, 
the inhabitants of each in like manner as the inhabitants of 
each town, having that provided at home, which they must 
otherwise go abroad for, and thus being saved like them, the 
expense and inconvenience of transportation. 

Though such a change, in either case, could not be brought 
about without expense, and though " its immediate effect would 
therefore be to diminish the revenue of the society," yet, as 
after a certain time, it would be likely that the new manufac- 
ture would be made at home in each case " as cheap or cheaper 
than abroad," its ultimate effect would be, more than propor- 
tionably, to increase the revenues of both towns and both 
countries. 

Acting on these new views, the legislators of both countries. 



44-2 APPENDIX 

about tlio same time, commence encouraging the manufactures 
in whicli their respective countries are detieieut ; and, by means 
of a system of premiums, bounties, and duties, on the detail of 
which it is unnecessary to enter, succeed so far, in the course 
of years, that silk goods come actually to be fabricated in the 
conntry whei^e no silk goods were manufactured, as cheaply as 
where they were exclusively manufactured, and hats to be 
made, where no hats were made, as cheaply as where hats were 
exclusively made. Part of the c^ipital and industry which went 
in the one case to the manufacture of hats, goes to manufacture 
silk goods, and. in the other case, part of the capital and 
industry which went to manufacture silk goods, goes to manu- 
facture hats. Both countries produce that at home, which they 
before imported from abroad, and are therefore saved the ex- 
pense attending that importation. 

Completely to et^ect this change requires an outlay, in both 
cases, of £1,000,000. Being etVected however, it of course 
save^ each country the expense of transport, which, at 25 per 
cent, on the imported goods, makes an annual saving of its ex- 
penditure, and increase therefore of it« revenue, of £400,000; 
so that, in two or three years time, the sum expended is repaid, 
and each community supplied with a new fund to furnish addi- 
tional comforts to its members, or to add to their capital. 
According to our author's tenets, this proceeding of both legisla- 
tors, although admitted to be practicable, is yet held to be 
necessarily, and in its very nature, injurious. 

Althougii it can seldom happen, that two countries are so 
circumstanced that both, according to our supposition, can 
beuetit equally by the effecting of such a change, yet, if one 
effect such a change, as far as that country is concerned it 
would seem to be beneticial, on a simple calculation of expense 
and gain, provided the saving of revenue produced by it, is 
greater than the expenditure of revenue necessary for producing 
it It is this end which the legislator generally aims at reach- 
ing by the regulations he imposes on tlie trade and industry of 
the society, and which, by these means, he often arrives at. 
Yet, even when in such cases successful, our author maintains, 
that his proceedings are necessarily, and essentially prejudi- 
cial to the interests of the society. That, even though they 



ADAM SMITH ON FREE TRADE 443 

may cause a commodity to be produced at home, cheaper than 
abroad, they must diminish, instead of augmenting, the national 
revenue and riches. A conclusion so extraordinary, is arrived 
at by a process of reasoning as extraordinary. It is come to by 
setting out from it. Two general axioms, somewhat ambiguous 
and vague, are assumed as truths. As usually happens to all 
other axioms employed in general reasoning, and capable of con- 
veying two senses, they are granted in the one sense, and applied 
in the other. We assent to the propositions, " the industry 
of the society can augment only in proportion as its capital 
augments, and its capital can augment only in proportion to 
what can be gradually saved out of its revenue," because we see, 
that the augmentation of industry and capital, the saving from 
revenue and increase of capital, are concomitants of each other; 
we perceive not, that in the application of these propositions, 
the sense in which we assented to them is abandoned, and that 
the augmentation of the capital of the society is assumed as the 
cause, and the sole cause of the increase of its industry, and the 
saving from revenue, as the cause, and the sole cause, of the 
augmentation of its capital. Whereas, from the observation of 
the increase of the productiveness of national industry, and of 
the amount of national capital, going on in general together, we 
may at least as justly infer that it is the industry which aug- 
ments the capital, as the capital the industry, and rather come 
to the conclusion, that part of the national resources should be 
employed in giving perfection to the industry of the society 
than that they should be altogether devoted to attempts to 
increase its capital. In fact, as capital, according to Adam 
Smith himself, is only valuable for the addition it makes to the 
efficiency of the national industry, and, as that efficiency is also, 
according to him, mainly dependent on the skill, dexterity, and 
judgment, with which it is applied, an expenditure of capital 
or revenue, having the effect of increasing the national skill, 
dexterity, and judgment, would seem to be the most judicious 
possible, seeing it directly increases those sources of production, 
from the indirect addition that it makes to which, capital is 
said to derive its sole value. 

It has been my endeavor to show, in the preceding exami- 



444 APPENDIX 

nation of the system of Adam Smith, that the doctrine there 
maintained, of the expediency of the legislator's abstaining from 
any attempt to give increased efficiency to the industry of the 
society by encouraging the growth of domestic arts or the 
importation of foreign, founded on the supposition of the per- 
fect identity of the means which add to the wealth of indivi- 
duals and nations, is erroneous. 

1. That the reasonings which make it assume the form of a 
self-evident principle, have their foundation in the ambiguities 
of language alone, and that, in reality, the presumption is 
against, not for it. 

2. That viewed as a consequence of the theory of the accu- 
mulation of capital, the division of labor, and the improvements 
resulting from the action and reaction of these principles on 
each other, the judgment we form of it must be altogether 
determined by the probable accuracy of the principles on which 
that theory proceeds, and by its coincidence with facts ; that 
granting, for the present, the apparent probability of the theo- 
retical principles themselves, they nevertheless do not agree 
with the [)henomena ; that there is a class of admitted facts, 
which they not only do not explain, but to which they are in 
opposition ; that the increase of the wealth of every community 
is acknowledged to be dependent, not only on the accumulation 
of capital and division of labor among its members, but also on 
the progress of arts in other communities, and their subsequent 
transfer to it ; that to effect this transfer, a measure admitted 
to be all-important to the prosperity of the community, the 
efforts of individuals are insufficient ; that, in his endeavors to 
prove that the legislator ought not here to interfere, Adam 
Smith runs into inconsistencies and contradictions, and that 
there hence arises a proof of the inapplicability of his doctrine 
to events of this order, and a strong presumption of the exist- 
ence of some fundamental error in the general principles of his 
system. 

[In the foregoing Rae successfully exposes some serious errors in the 
economic theory with which Adam Smith supported his doctrine of free 
trade. Especially is this true with respect to Smith's theory of saving. 

But in the course of his own positive teaching on the subject of the benefits 
of an educational tariff, Rae does not himself avoid falling into errors in 



ADAM SMITH ON FREE TRADE 445 

economics. The chief of these is his assumption that always, or nearly 
always, a new art introduced by measures of protection, will make im- 
provements in its strange environment — will exhibit the working of the 
principle of invention — to such a degree, that its products will soon be 
furnished cheaper by the domestic manufacturer than before by the foreign 
importer. It is in the nature of things that there will be, with respect to 
such experiments, many cases of disappointment ; and when this last takes 
place, it is inevitable that as a rule defeat will not be acknowledged and the 
project abandoned. But this brings us back again to politics. 

It is especially worthy of note that Rae's argument for the adoption of 
measures of protection rests entirely upon indirect and collateral economic 
considerations. The direct and immediate effects of obstructing foreign trade 
in articles which are not luxuries are injurious — they retard the formation 
and exhaustion of instruments. The position taken in Chapter XI. is all 
that any free trader could desire. It is only the ulterior economic effects of 
protection (explained in the present Article) which may work beneficially, 
offsetting proximate effects. 

It seems doubly strange, therefore, that Rae should have overlooked all 
the contingencies of a political nature respecting this subject. In all the 
rest of his writing he takes the high, comprehensive, sociological point of 
view, and is sagacious — scenting danger from afar. The chief evil of pro- 
tectionism is that it leads inevitably to corruption — not merely corruption 
as ordinarily understood, but a general lowering of the tone of the national 
life. It is well known that in the United States to-day each interest and 
section prides itself on its superior finesse in securing tariff favors for itself 
— in getting money from fellow-citizens by indirection. The system as it 
actually works in practice has become primarily not a matter of national 
"creation," but a matter of individual and local "acquisition" of wealth, 
and it carries the spirit of graft into every corner of the land, and makes 
it respectable. What it means to a people to preserve its spiritual integrity — 
that it pays for a people to hold to ideals, even though arts perish — Rae very 
well knew. The following passage from his unpublished manuscript sets 
forth this important truth most eloquently :] 

" Now though it is undoubtedly true in the general that 
with regard to external nature knowledge is the power which 
raises man in the scale of being and distinguishes him from 
the inferior animals, yet we by no means find that it is the 
degree in which the}^ practically apply this knowledge that 
determines the relative position of particular races or com- 
munities. It is not the external and visible — what he eats, 
what he drinks, or wherewithal he is clothed — but his inner 
and secret life that makes the man, constitutes his joy and 
sorrow, shapes his course through this world and determines 
his fate for the next. So it is with nations. It is neither the 
form of their dwellings, the victuals that nourish them, nor 



446 APPENDIX 

the fashion of their dress ; it is their interior hfe, the degree 
in which the perception of the true, the good, the beautiful 
permeates their being, the view which their social feelings and 
passions lead them to take of things external and the course 
of action they are thus prompted to pursue, that makes them 
what they are, which ultimately determines their relative 
positions and controls their destinies. 

"It is known that the northern portion of the island of Great 
Britain had at an early period made greater progress than the 
southern in the arts of peace. It could scarcely well have 
been otherwise. For, while for about two hundred years 
England was devastated by the cruel wars necessary for the 
subjugation of the Saxon to the Norman yoke, during all that 
time, Celt, Saxon, Norman, and Dane lived peacefully together 
in Scotland under a succession of native princes and were 
being blended into one common people. There is full evidence 
that the rude abundance of an agriculture successfully prose- 
cuted was widely diffused among them ; and facts are not 
wanting to testify that the more elaborate arts had there 
begun to flourish. 

" But now the Norman having brought England completely 
under his rule sought to extend that rule over Scotland. His 
domination was hateful to the people and they determined 
never to submit to it. But how resist the united force of 
a kingdom so much more powerful than their own ? They 
retreated to the fastnesses of their mountains, woods, and 
marshes, and, leaving the open country a prey to the enemy, 
they watched their opportunity, and only issued forth and 
gave battle when to conquer was possible. A warfare 
continued thus for many generations necessarily put to flight 
all but the most essential arts, rendering the country bare and 
barren, and the mode of life of the inhabitants the rudest 
possible. So their French auxiliaries describe them. They 
depict them as a poverty-stricken and barbarous race, among 
whom it was impossible to live. Here was, in many respects, 
a sensible retrogression — a retrogression to a state of semi- 
barbarism. The question is, was it altogether a retrogression ? 
Had the Scot made a step backward, or was it in truth a step 



ADAM SMITH ON FREE TRADE 447 

forward ? In my opinion there can be no question that it 
was a step in advance. In thus throwing to the winds all 
the comforts of life, and counting as nothing what he sacri- 
ficed or suffered for his national liberties and national in- 
dependence, the spirit of the Scot assumed a higher tone 
and his soul was trained greatly to dare and bravely to do, 
wherever great and worthy objects were to be achieved. 
Adversity was upon him, 

' Stern rigid nurse, thy rugged lore 
With patience many a year he bore.' 

"But he issued from her school a greater and nobler man 
than he ever otherwise could have become [and what he has 
accomplished in happier times all the world knows]." 



AUTIIOR'8 NOTES. 

Note A. Bcfenrd to on puije 1. 

" Wo ilorivo I'lom IVr. Smith no assistance in forniino- o\ir 
opinions on this important subject; for he seems to have had 
no tixed ideas in ivhition to it. Indeed, there is no opinion 
that has been any wliere maintaineil on the subject of the 
sources of national wealth, whieli does not appear to have 
been adopted in dilierent parts of the Inquiri/ into the Wealth 
of Nations. 

1. " The annual labor of every nation is" at one time stated 
to be ■ the fund wliich orioinally supplies it with all the 
necessaries and eonveniencies of life which it annually con- 
sumes, and which consists always either in the innuediate 
produce of that labor, ov in what is purchased with that pi'O- 
«.iuce from other nations. "^ 

'2. Lands, mines, and tisheries, elsewhere are repirded as 
replacino", "with a protit, not only the capitals employed in 
them, but all the other capitals employed in the community." - 
That, however, which replaces all the capital employed in the 
conununity, and is the source from whence they derive their 
protit, must be the sole source of wealth. Mankind are, there- 
fore, here considered as deriviuii" the whole of their wealth 
from land.^ 

3. Again, plain reason is stated to dict^xte that the real 
Avealth of a country coivsists in the annual produce of its laml 

' ]\\altli o/ yalion.<, vol. I., p. 1, 4to. edit. This opinion is maiutttined by 
Air. Hnuie. Sec his Discou)\te of Commerce, p. \'2, edit. 1752. 
■■^ Wealth (yWo/i()H,<, vol. I., p. 008, 4to. edit. 
^Ibid., vol. I., p. 414. 



AUTHOR'S SOTES 440 

an'l \;i})')r; and thiH opinion, which coinciden with that of the 
liisho);; of Cloync/ and the learned author of the Essay on 
Mo'iic/ij (i/n/l Coins,'''- is rnofst generally adhered to by Dr. Smith. 

4. In another part of the work, however, we find it asserted, 
thai " land and capital stock are the two ori^'nal sources of 
all revenue, both private and public: capital stock pays the 
wages of productive labor, whether employed in agi'ieulture, 
manufactures, or commerce."'^ Land and capital are, there- 
lore, here deemed the sole sources of wealth ; and laV>or is 
considered as deriving from them its wages, wit?i.out adding 
to the opulence of the c<'jmrnunity. 

5. Lastly, we are taught i/j consider land, laVjor, and capital, 
as being all three sources of wealth ; for we are told that, 
" whoever derives his revenue from a fund that is his own, 
must draw it either from his labor, his stock, or his land. The 
revenue rlerived from labor is called wages; that from stock, 
profit ; and from land, rent ; " * an opinion whicVx seems to liave 
been hinted at by Sir William Petty ,^ when he stated it as an 
irripedimfjnt to the wealth of England, that taxes were not 
hivied upon lands, stock, and labor, but chiefly upon land alone, 
though land and labor are generally considered by tliat 
ingem'ouK writer as the sole source of wealth. 

in treating of political economy, the science which professes 
to display and to teach means of increasing the wealth of a 
state, it wo\ild seem that the first and most anxious object of 
inquiry ought to have been,, what wealth is, and from what 
Hources mankind derive it ; for it appears impossible to discuss 
with precisirjn the means of increasing any thing, without an 
accurate notion of its nature and of its origin." Lauderdale, 
[Inquiry, 2nd ed., pp. 112-116.] 

To this catalogue of the various notions held out in the 

' Qnerisf,, Quer. 4. " Whether the four elements, and man's labor therein, 
be not the true Hource of wealth." 

'■' " Land and la))or together are the Bourcee of all wealth; without a com- 
petency of land, there would be no HubsiHtence, and but a very poor and 
uncomfortable one without labor. So that waallh or riches consists either in 
a property in land, or in the products of land and labor." 

■■> Wealth ofNalionn, Vol. II. p. 560. '^ Wealth of Natiom, Vol. II. p. 63. 

'■' Tracts, edit. 1768, p. 268. 

2 F 



450 APPENDIX 

Wealth of Nations, concerning the nature of that wealth, Lord 
Lauderdale might have added another, showing some general 
resemblance to that exhibited in the present work. " Wealth," 
we ai-e told, B. V. c. i., " always follows improvements of agri- 
culture and manufactui-es, and is, in reality, no more than the 
accumulated produce of those improvements." 

Note P>. Hef erred to on page 3. 

" Si Ion se demande en etiet en quoi consiste la richesse, on 
n'est pas peu surpris de ne trouver dans les auteui's les plus 
estimes que des opinions ditte rentes ou contraires. 

" Les uns la font consister dans Tuniversalite des proprietes 
privees,^ et d'autres dans I'abondance des denrees.^ 

" Ceux-la distinguent la richesse publique de la richesse 
particuli^re, donnent a la premiere une valeur d' usage et non 
d'echange, et a la seconde ime valewr d'echange et no^i d' usage ^ 
et font consister cette derniere dans la valeur venale dxi pro- 
duit net? 

" Ceux-ci la composent de toutes les choses materielles dont 
I'homme pent faire usage pour satisfaire un besoin ou une 
jouissance de sensualite, de fantaisie ou de vanite.* 

" Un autre ecrivain regarde la richesse conune la possession 
d'une chose plus desire'e par cnuv ijui ne l' out pas que par 
ceux qui en jouissent.^ 

" Un autre ecrivain la deiinit le superjlii.^ 

" Un autre ecrivain la place dans I'accumulation du travail 
exigibleJ 

^Treatise of taxes, by Sir William Petty — Gregory King's Calculation, pub- 
lished by Davenant — Dr. Beeke, Observations ou the produce of the in- 
come tax. 

2 Dime royale du marechal de Vauban. 

* Physiocratie, p. US — Philosophie rurale, p. 60. 

*Essai sur la nature du commerce, par Cautillon. — Abrege des prineipes 
d'economie politique, par M. le senateur Germain Garnier, Paris, 1796. M. 
Malthus, Prineipes d'economie politique consideres par rapp<.nt ^ leni-s appli- 
cations practiques (page 23). 

' Richezza e il possesso d'alcuna cosa che sia piii desiderata dagli altri che dal 
possessore. Galiani, della Moueta. 

*Ilsuperfluo costituisce la ricchezza. Palmieri, pubblica Felicity, tome I. 
page 155. 

^ Princ. d'econ. polit., par M. Canard, Paris, ISOl. 



ArrnoYc^, votes 46i 

" A'Lam-Smith dit i'dtiiM ({ii'mi homme est riche ou pauvre 
H<^}lon Je pluK ou moirw dx^ chosew ri'^j^ftaires, util^ ou agr^- 
able« a k vie dont il peut m procurer la jouinsaace ; tantot 
qu'un homme est riche ou pauvre ftelon qu'il peut disposer de 
plu« ou moimi de travail; tant6t que la richesse r<$elle d'un 
pays consists darwi le produit annuel de ses terres et de ma 
travail^ 

" Un (fc'rivain i-^ant d«^finit la riche«Be, tout ce que rhomme 
d^iire corarae utile et ag-r<^able.^ 

" LeH richeB8e«, dit M. Say, ^ conipowent des chof»es qui ont 
une valeur,'^ 

" M. Ricardo penBe que la valeur differe essentiellement de 
JA richeKW, et qixe Je« choses, une t'oj>j qu'elles 8ont reconnues 
utiles par elleB-rn6me«, tirent leur valeur (icltangeable de deux 
sourceft, de leur raret^, et de la quantity de travail n^cessaire 
pour len ii/:,(^u.4viv^ 

" M, iSinmondi d<$finit la richesBe; le fruit du travail accumul^ 
et non encore consomraii^,^ 

" Cett^i incertitude sur la- nature de lja richesse se reprodiiit 
dans Tex^nien des rrioyens qui peuvent contribuer a sa progres- 
sion, a son accroissernent et a sa grandeur. 

" Ceux qui ont ^rit les premiers sur cette matiere im- 
portarite, s<^duits par Tapparenc^i des faits, ont attribu^; aux 
rn^taux pr^ieux, obtenus en retour de I'exportation des pro- 
duits du so] et de Findustrie de chaque pays, la cause de la 
richesse des peuples/^ 

' Rich, dan itat,, in 4fco. vol. I. pag, 209 et 33%. 

*An inquiry into the nature and origin of public wealth, by the Earl of 
Lauder^iale, chap. 2. pages 56 and 57. 

'^Trait/j d'<kson. polit., page 1. 

* Des principes de IVicononiie politique et de I'imp^t, tome II. chap. 20. 

^ Nouveaux principes dVjconoirue politique, tome I. page 60. 

''En Angleterre, Raleigh, P]s«ai Hur le commerce, en 159.5. — Edouard Miij- 
»elden, Cercle du commerce, en 1623. — Louis Roberts, Tr<;sor du trafic, en 
1641, — Thomas Munn, Triisor de I'Angleterre pour le commerce /stranger, en 
1664. — Fortrey, InU-.t'itR et am<^Jioration8 de I'Angleterre, en lf>64. — Davenant, 
dans son ouvrage relatif au nommtitcifi et au revenu de I'Angleterre, tome I. 
page 16, en 1696. — M. Martin, inspecteur-g/}n';ral des douanes, ou le Marchand 
anglais, en 1713. 

En Hollande, Jean de Witt, M^moires, en 1669. 

En Italic, Serra, Breve tratto delle cose che possono far abondare li rcgni 



452 AITENDIX 

" D'autres ecrivains imi out placo la souroo ilaiis la ivdnotioii 
ilo rintoivt do raroont.' 

" Los oomioniistos. ontraines par iino thoorio seduisfuite ot 
captionso. ont oxalte lo syst^lne ajjricolo.- 

■' Adam-8niith lui a profoiv lo travail qui so porfoot ionno par 
sa division, ot ipn, apros qu'il ost tini, so tixo ot so roaliso dans 
un objot ponnanont/'' 

" Lord Landonialo. dans I'ouvrai^^o procitt^. onvracfo roniar- 
quablo par la tinosso do sos apor(;us, fait tlorivor la riohosso de 
Tart do siniplitior ot d'abroij^or le travail et d'anieliorer wses pro- 
duits. resultat noeossaivo do raccnnuilation ot ilo la diroctiim 
dos capitanx. 

■ M. Say fait dt^rivor la plus o-rando auiiinontation do la 
riohosso. do I'oniploi dos oapitaux dans laoriculturo.'' 

■ He I'union dos syst^nios irao;rioultiu-o ot do coinnioroo. dit 
M. Jlalthus, dopond la plus ijrando prosporito nationalo/' 

" jM. Kioardo ost d'avis quo la riohosso dun pays s'aocroit do 
iloux uianioros : par Foniploi d'uno portion phis eonsidorable 
du rovonu a raoeroissoniont du travail proihiotif, on imi ron- 
dant plus produotivo collo qui oxisto.'' 

" ^L Sismondi no voit laccroissoniont dos riohossos quo dans 
TaooiiMssoniont dos jouissancos nationalos." " CJanilh, ih's 
Si/sieni!^, tonio I. p. 1-1. 

d'oro, en 1(513. — Genovesi, Lezioni di ooonoin. oivilo. on 1704. — Muratori, 
Felioiti'i pub., oap. U>, sul priuoipio. — Corniani, RoHoz. sulle monete. 

Eu Franoo, lo cardinal do Kicholion ot Colbort, Ordonntuioes ot roglonious 
pendant lenr administration. 

^ Thomas Culpeper's Useful remark on the misoliiof of an high national 
interest, en ItUl. — Josias Child. Brief observations oonoerning trade and 
interest of money, en Uv>l. — Samuel Lamb, Rinks and lumber houses, 
on UioT. — William Patterson, autour du I'rojet de la banque ilo Londros, en 
UiiU. — Barnard, dans ses Discours sur la roduotion do I'intorot do I'argent, en 
1714. 

*Physiooratie. 

^Riohosso dos nations, liv. 11. ohap. 3.^ — Uavid Humo pout avoir donne ii 
Adam-Smith Tidoe do oo systomo. 11 dit littoralement (juo les hommos no 
pouvent aequerir que par le travail. (Essai sur le commerce, edit. d'Edim- 
bourg, 18(>4, in Svo, Vol, I. page 'J77. ) 

*Il>id., tome II. page "231. 

'Addition aux quatre premioros oditions de I'Essai sur la population, 
chap. 11. 

'^ Ibiii. ' Id., ton\o I. page 53. 



AUTHOR'S NOTES 45^ 

Note C. Referred to on 'po^ge 379. 

At the time the reference to this note was made, it was my 
intention to have here inserted some extracts from the North 
American lievievj, and some other publications, for the pur- 
pose of showing the views entertained in this country 
concerning the system of Adam Smith, and some of his 
followers. As far as concerns this continent, however, these 
extracts would be superfluous, and I have, therefore, thought 
it better to omit them, until such time as the work appear in. 
Great Britain. 

Note D, Referred to on page 130. 

Adam Smitli licro admits, to a certain extent, the con-ect- 
ness of the general notions concerning the nature and office of 
money, entertained by the school of political economists who 
preceded Hume. Had he done otherwise he would have acted 
very unfairly, for his own reasonings, on this subject, are 
sometimes little more than a repetition of theirs, as might be 
shown by an examination of parallel passages. Compare, for 
instance, the two following. " Although they who have their 
estates in money are said to be a great number, and to be 
worth £5,000 or £10,000 per annum, more or less, which 
amounts to many millions in all, yet are they not possessed 
thereof altogether at once, for it were vanity or against their 
profit to keep continually in their hands above £40 or £50 in 
a family to defray necessary charges. The rest must ever run 
from man to man in traffic for their benefit, whereby we may 
conceive that a little money (being made the measure of all 
our other means) doth rule and distribute great matters daily 
to all men in their just proportions."^ "As the same guinea 
which pays the weekly pension of one man to day, may pay 
that of another tomorrow, and that of a third the day there- 
after, the amount of the metal pieces which annually circulate 
in any country must always be of much less value than the 
whole money pensions annually paid with them." ^ 

The more recent followers of Adam Smith have not always 

1 Mun, p. 42, 12ino edit., published in 1664. 

2 ]y(.alth of Nations, 13. II. c. II. 



454 ArrKNlMX 

iivx«t» the t\*rlier wvitws *H)\ml jxwUw. Thv\s Mr. M'C\ilUM?hv i»» 
his JVincipifit <*/ I\>^itii\d ICi\momif, assorts that th<* ii\on'nn 
tilo sYstoau ol" which l»o tvrittvms M\iu ouo i^i' tho t\Hilit\st twul 
nhh^t detViuioj^s. x\H*kv>j\tHl uuMit^v the aulv ^Yt^iUt}\. »uui 
ivuiv^rks, that ■ tho siuiplo i,\vnsivhn'Htian. thrtt all buying" and 
selling is in ivi^litv nothing" luoiv than tho Uutorini; of vuu> 
iXMuvnvnht Y tvn- aiw^thorv — of a Cfrtaiu tjuautity of (xwu oj* wool, 
tW exaiupJo, tW a wrtain quantity wf jj;\>Kl or silver, antl cicy 
(vr^^^, Nvas oxxtiivly o\ orKHvktHl." Nvnv instoavl oi" ixmsiilorin^' 
moi\ey as tho only wealth. Mun« on the t,H>ntrary. stns. " they 
that have waiws camun want nu\i\ey ; — neither is it that 
money is the life of traiie as if it ovn\Ul not snlvsist witliont 
the same; t\xi" we know that theiv was ^iwu trjuiin^' by way 
«.vf ev>n\nnitation or \v\rter. whei\ theiv was little n\oney stit^ 
ring in the worKi." ^ That the true use of n»«.\nev is its atloixl- 
iuii' a tixtnl sttwi^lfuxi for the |xriw of other thiu^i-s, is a ^hx^trine, 
invl<HHl. laivl dvnvn by Innlin a century t^rlier than Alun. " Oar 
si la iuv>uoye, qui cU>it ivijler le prix de tvnites eh«.vst\s t\st 
niuaWe et inetvrtaine. il n y a pei-svnme qui puisse fair tvstat au 
vi'ay vie w quil a ; lt\s i\uiti"acts senuit inwrtains, lt\s clian^vs, 
taxtNs. ga^tNs, etc,, iuwrtaines." etc/' The n^U en\>r i\f those 
writei's was their ti^ansferrini; to national wt\-Uth the rules 
whioli apply to individual wealth ; it was 1 appi-eheiul. theiv- 
fojv» the same in kind as I have hintetl in the text, as that of 
Adan\ Sn»ith hin»st»lf, though ditieivut fiwn it in deijive. 

NorK F. Here-t^tyid to on jiHit/f 90. 

'^ MeuHxrial dans hxp\el on pix^pvvse ^ rEmjHvitnu' un nvoyen 
de stHxnirir le peujxle dans K^ annees steriles."' {Lftttys 
Ediriitnteiii, Tom. XI. p. 427. "> 

Litvu-que^y. l^the Mamlarin whv^ nu^morialiaes,") after nan-at- 
inv; the miseritNS sutleitHl fi\>m famine in the pi\>vinet^ Ohansi, 
fivu\ which he dattss, and statinjj the insuthciency of the 
ai\cient piwisimis vxf the empiiv, w hich sup^H>se a quantity of 
ricx* to W stonnl vip in the inijvrial niapvaiines, suthcient t\^ 
all emei-gencit^s, but which aiv ne«iUH.'ttHl by the su^HU'ior 
Mai\daritu\s, fivm the multiplicity of the ati■ai^^s they have to 

* Vt^fK qfyaSiottit, \\ 'J4. * iV Ui Kv/^nbiiitu^, liv. VI. 



ArjTHOR'H SOIT.H 465 

mansi'fffi, or alrniHcj] hy their depend entH, and which are, in fact, 
regarded an oV>BoJete; pr^xjee^lK to ntate his own scheme for 
obviating, in future, nirnilar calamities, 

" Xe Hcroit-i] done pas a propos de profiter de ce temps 
d'atxjndArice pour remplir de grains les gi'eniers publics, en les 
payant de I'argent tir^ du tr^sor de votre majesty? Par 
exernple, supposon^ fjue pen^^lant cinq ans on y pn't ch^ue 
ann^^e quatre cent miJle francs, destin(ies a ces provisions pour 
soulager le peuple dans le8 besoins pressans. On emploira 
d'abord cerjt milJe francs pour r^parer les anciens magazins 
4e Tay-quen, capital de ia province, pour en batir de nouveaux, 
^t pour amasser du riz, afin d'assister dans le temps de st^rilit^ 
le t^jrritoire de c^^itte ville, de Fuen-tchou et autres lieux qui 
n'en sorjt fort (i)oignes. Du cote du niidi est la ville de Ping- 
yang, de King-tcheou, et autres endroits circonvoisins. La 
grande ville de Diugan est situ(se vers I'occident; en y faisant 
la meme df^pense, on sera en (^tat de distriVjuer du riz a Ke- 
tcheau, a Leao-tcheau, et autres villes subalternes de sa 
d<ipendance. Erifin de semblables magasins qu'on etablira 
dans la ville de Tai-tong, qui est au nord, pourront aider a la 
subsistence des petites villes de Long-pin Kingvou, et autres 
semblables. Ce sont-la les quatres principales villes de la 
province, ou seront places les magasins gf^neraux, et d'ou les 
grains se repandront dans les lieux qui en auront besoin." 

He next mentions the precautions he conceives necessary to 
guard against malversation. "Or apres des precautions si 
n<^cessaires, supposons que, de la lib(iralite de votre majesty, il 
soit donned cette ann^e a chacun de ces villes cent mille francs 
pour capital : si Tannic est abondante, on peut, de ces cent 
mille francs, acheter au raoins trente mille grandes mesures de 
riz, lesquelles multiplicies par quatre, feront, dans les quatre 
villes, cent vingt mille mesures. Depuis la r^colte jusqu'a la 
fin de I'annde le prix du riz est mediocre ; ce n'est que dans le 
printemps que le prix commence a augmenter, alors on ouvrira 
les magasins, et on vendra ce riz. De cette vente on aura 
deux a vantages ; I'un est qu'en mettant I'abondance, on 
emp^chera que le prix du riz ne croisse trop : I'autre, que le 
vendant alors un peu plus cher qu'il n'a 4t4 achet^ dans le 
temps d<; la rf^colte, on sera en <itat, au moyen de ce profit, 



456 APPENDIX 

d'acheter apres la novivelle moisson au moins dix mille mesures 
de riz dans chaque endroit, de plus qu'on u'eii avait I'anuee 
precedente. Par-la, I'ancien riz sort des greniers, et le nouveau 
le remplace. II sort a un prix plus cher et rentre a bon 
marche. N'est-ce pas un excellent nioyen de multiplier ce riz, 
en soulageant meme le peuple ? car on ne pretend pas s'enrichir 
aux depens du public. Ce riz tire des magasins sera vendu 
au cours et a un prix raisonnable, quoique plus cher qu'il 
n'^tait huit mois auparavant. Rien de plus juste et de plus 
utile dans les annt^es abondantes. Par cette conduite, le riz 
chaque annee se niultiplie dans le magasin ; et si pendant cinq 
annees il se fait une abondante recolte, la provision d'un 
endi'oit, qui n'etoit d'abord que de trente mille mesures, pent se 
trouver a la cinquieme annee de plus de quatre cent mille 
mesures de riz. En cas de necessite, n'est ce pas deja un excellent 
moyen de soulager toute une province ? . . . dans les disettes 
ordinaires, le rix sera vendu a une juste prix. Dans celles qui 
passeront un peu I'ordinaire, on en pretera au peuple, et dans 
les grands necessites on le distribuera par aumone." Tiree de 
la Gazette Piiblique par le R. Pere Contancin. 

The inliabitants of the island of Trong-ming often enter into- 
voluntary associations, which have for their object the relief 
of some individual whose affairs have become deranged. They 
give him the means of reestablishing himself in a way which 
they conceive burdens them a little, though not very much. 
The association consists of seven individuals, including the 
person for whose relief it is formed. The principle of it will 
be understood from the following table. 



First year. 








Second year. 




The tirst, that is, the 


person 


for 


The 


first gives 


1-5 


whose benefit the company 


is 




second receives 


60 


formed, receives 


60 pistoles 




third gives 


13 


The second gives 


15 






fourth 


11 


third 


13 






fifth 


9 


fourth 


11 






sixth 


7 


fifth 


9 






seventh 


5 


sixth 


7 










seventh 


5 











AUTHOR'S NOTES 



457 



Third year. 
The first gives 


15 


Fourth year. 
The first gives 


15 


second 


13 


second 


13 


third receives 


60 


third 


11 


fourth gives 


11 


fourth receives 


60 


fifth 
sixth 


9 

7 


fifth gives 
sixth 


9 

11 y 


seventh 


5' 


seventh 


5 


Fifth year. 
The first gives 


15 


Sixth year. 
The first gives 


15 


second 


13 


second 


IS 


third 


11 


third 


11 


fourth 


9 


fourth 


9 


fifth receives 


60 


fifth 


7 


sixth gives 


7 


sixth receives 


60 


seventh 


5 


seventh gives 


5 


Seventh year. 
The first gives 


15 


Seventh year. 
fifth gives 


7 


second 


13 


sixth 


5 


third 


11 


seventh receives 


60 


fourth 


9 







Although the sum paid by each of the associates is unequal,, 
and that the first disburse more each year than the last, yet 
the Chinese think that the conditions of the contract are 
much more favorable for the former than for the latter, be- 
cause they sooner receive the sum of sixty pistoles, and the 
great profits they derive from commerce, well indemnifies 
them for the advances they have to make. Letter of Father 
Jacquemin. Lettres Edijiantes, Tom. X. p. 127. 

I subjoin a few extracts from different authors, indicative of 
the strength of the accumulative principle in China, of the 
orders at which instruments remain there, and of some other 
circumstances in the condition of that empire, which I have 
referred to in the text. 

" The spirit of gain by working on an extensive plan, and 
by new methods, for supplying multitudes with particular 
articles, is not prevalent among the Chinese, unless in large or 



4o8 APPENDIX 

inaritiino towns. Some thovo are. howovor. in almost every 
villaije. who seek U^ aecuuuilate wealth by takino; advant^ije 
of the wants of the people around them. Shops for lending- 
money on pledges are eonnnon everywhere. Very hijjh 
interest upon loans is alUnved by law. The practice of such 
loans implies, certainly, ^leat improvidence in the n\ultitude. 
or o^reat uncertainty in the success of their pursuits. The 
facility of culture, and the abundance of crops, when no 
oalan\ity intervenes, enables them in many places to bear such 
burdens, thou^-h often in a very impoverished condition." 
Stanuto)). Vol. II. p. 44. 

'■ Pawn-brokei"S shops are as nui\ierous in Chinese cities as 
in London." EUi'^' K)iiIhis--^>/. p. \'20. 

" L'usure ^ui reo-ne parmi les Chinois est nn autre obstacle 
bien ditheile a vaincre. Loi*squ'on leur dit tpiavant que de 
recevoir le baptome. ils doivent restituer des bieus acquis par 
ces voies illicites. et aussi miner en un jour toute leur famille. 
vons m'avouerez quil faut un grand miracle de la ofrace pour 
les y determiner." Ltitres Edirii(utt's, Tom. X. p. 379. 

" La deuxieme cause de la disette n'est pas seulemeiit, connne 
on so persuade, la nudtitude du peuple Chinois; j'avoue 
quelle y contribue beaucoup : cependant je crois que la Chine 
fournit des o-rains sutlisannnent pour la subsistence de tons ces 
l\abitans: mais e'est quon ne menage pa« assez les grains, et 
qu'on en fait une consonnnation otonnante pour fabriquer du 
riz et de leau-de-vie on de la raque. . . . cest surtout le soir 
avant que de se coucher quils en font usage, principalement 
les n\archands. les artisans et les soldats. Ils out chacun dans 
la chambre on ils eouchent un fourneau a charbon de pierre 
oil ils font cuire le riz, le the, et ehautter cett^ sort de boisson : 
ils la prenuent eu mangeant des herbes salees, et s'euivrent a 
pen de frais. Si par meganie, on etant a moitie ivi*es, ils lais- 
sent tomber de eette raque dans le feu, la tlamme s'el^ve 
bientot jusq'au plancher, qui n'est fait que de natt^JS d'osier on 
de chassis de papier, et dont la hauteur n'est faite que de trois 
ou quatre pieds au dessus de la tete d'un honnue, Aloi-s 
dans un instant, route la chambre est en feu : et parce que les 
boutiques oil eouchent les marchands et la plupart des niaisons 
du peuple, ne sont pas separees de leur voisins par des maitresses 



AUTHOR'S NOTES 459 

inurailles, et que sou vent le.s charpentes sont lies en.semble. le 
feu s'dtend avec rapiditd et fait de grands ravages avant qu'on 
ait pu r^teindre. 

" Ajoutez a cela f|ue I'usage trop frequent de cette boisson 
fait inourir f]uantit(^ de menu peuple d'une maladie qu'on 
nomme yeche a la quelle on n'a pu trouver aucun remede. 

" Si la disette n'eclaircissoit pas de temps en temps ce 
grande nombre d'habitants qui contient la Chine, il seroit 
difficile qu'elle put subsister en paix. II n'y a point de guerre 
comme en Europe, ni de pertes ni de maladies populaires ; a 
peine en voit-on dans un siecle." Lettres Edijjxintes, Vol. XII. 
p. 200. 

Many circumstances might be adduced, to show that it is 
not so much the want of power to accumulate, as the want of 
a desire to accumulate sufficiently strong to prompt to effec- 
tive action, which prevents individuals in the lower classes in 
China, from rising to opulence. Of these I might mention 
the number of eating-houses, and the goodness of their fare, 
and the occasional richness of the attire of the common people, 
as described by recent travellers. I prefer, however, citing 
an anecdote from the Lettres Edifiantes, as these are probably 
less known to the reader. 

" Un vieillard vient le trouver " (le niissionnaire) " pour lui 
representer I'extreme desir qu'il avoit que Ton construisit une 
eglise dans son village. Votre zele est louable, lui dit le mis- 
sionnaire, mais je n'ai pas maintenant de quoi fournir a une 
pareille dt^pense. Je pretends bien la faire moi-meme, repartit 
le villageois. Le missionnaire, accoutume a le voir depuis 
plusieurs annees mener une vie tres-pauvre, le crut hors d'etat 
d'accomplir ce qu'il promettoit ; il loua de nouveau ses bonnes 
intentions, en lui reprdsentant que son village etant tres-con- 
siderable, il y falloit batir une eglise aussi grande que celle qui 
etait dans la ville voisine ; que dans la suite il pourrait y 
contribuer selon ses forces ; mais que seul il ne pourrait suffire 
A de si grands frais. Excusez moi, reprit le paysan, je me 
crois en situation de faire ce que je propose. Mais savez vous, 
r^pliqua le pere, que pour une pareille entreprise, il faut au 
moins deux mille ecus ? Je les ai tout prets, repondit le 
■vieillard, et si je ne les avait pas, je n'aurois garde de vous 



460 APPENDIX 

importuner par une semblable demande. Le pere fut charme 
d'apprendre que ce bon homme, qu'il avoit cru fort pauvre, se 
trouvat neanmoins avoir taut d'argent comptant, et qu'il 
voulut I'employer si utilenient. Mais il fut bien plus surpris, 
lorsqu' ayaut eu la curiosite de demander a ce villageois com- 
ment il avoit pu se procurer cette somme, il repondit ingenu- 
ment que depuis quarante ans qu'il avait con9u ce dessein, il 
retranchait de sa nourriture et de son vetement tout ce qui 
n'etoit pas absolument necessaire, afin d'avoir la consolation 
avant de mourir de laisser dans son village une eglise elevee a 
riiomieur du vrai Dieu. Vol. XII. p. 363. 

To these extracts I am induced to add the two following, 
as strikingly illustrative of the strange contrasts which the 
morality of the Chinese exhibits. 

" This dominion is tempered," (that of husbands over their 
wives) "indeed, by the maxims of mild conduct in the different 
relations of life, inculcated from early childhood, amongst the 
lowest as well as the highest classes of society. The old per- 
sons of a family live generally with the young. The former 
serve to moderate any occasional impetuosity, violence, or 
passion of the latter. The influence of age over youth is sup- 
ported by the sentiments of nature, by the habit of obedience, 
by the precepts of morality engrafted in the law of the land, 
and by the unremitted policy and honest arts of parents 
to that effect. They who are past labor, deal out the rules 
which they have learned, and the wisdom which experience 
taucfht them, to those who are risino' to manhood, or to 
those lately arrived at it. Plain sentences of morals are 
written up in the common hall, where the male branches of 
the family assemble. Some one, at least, is capable of reading 
them to the rest. In almost every house is hung up a tablet 
of the ancestors of the persons then residing in it. References 
are often made, in conversation, to their actions. Their 
example, as far as it was good, serves as an incitement to 
travel in the same path. The descendants from a common 
stock visit the tombs of their forefathers together, at stated 
times. This joint care, and indeed other occasions, collect 
and unite the most remote relations. They cannot lose sight 



AUTHOR'S NOTES 461 

of each other ; and seldom become indifferent to their respec- 
tive concerns. The child is bound to labor and to provide 
for his parents' maintenance and comfort, and the brother 
for the brother and sister that are in extreme want, the 
failure of Mdiich duty would be followed by such detestation 
that it is not necessary to enforce it by positive law. Even 
the most distant kinsman, reduced to misery by accident or 
ill health, has a claim on his kindred for relief. Manners, 
stronger far than laws, and, indeed, inclination, produced and 
nurtured by intercourse and intimacy, secure assistance for 
him." Staunton's China, Vol. II., p. 21. 

" The frail females in the boats had not embraced this 
double occupation, after having quitted their parents, or on 
being abandoned by them on account of their misconduct ; 
but the parents themselves, taking no other interest in the 
chastity of their daughters, than as it might contribute to 
an advantageous disposal of them to wealthy husbands, feel 
little reluctance, when no such prospect oifers, to devote them 
to one employment," (that of conveying passengers in boats) 
" with a view to the profits of another." (of prostitution.) 
Ihicl. p. 328. 

Note J. Referred to on page 267. 

A gentleman of my acquaintance, who had been long among 
the Indians, and ranked among them as a brother warrior, 
once travelled a great distance in the far interior to visit 
a chief. His friend received him in the spirit of hospitality 
natural to the red man. In proof of it, he declared he would 
feast him, as he had seen white men feasting their friends, — 
for he too had been a traveller. Accordingly, his " woman- 
kind " not being adequate to the task, he set about cooking 
and serving dinner himself, and, considering all things, suc- 
ceeded wonderfully. As imitators, however, will often copy 
rather defects than merits, so the relish of the repast would 
have been somewhat improved, by his memory having been a 
little less tenacious of a few, of what doubtless seemed to him 
the strange ceremonies of the white men. For example ; he 
had seen at the houses of some of his white friends, their 
young men employed rubbing the dishes, off of which the 



462 APPENDIX 

guests ate, with a small square piece of cloth. Now, the only- 
piece of cloth, like this, which he happened to have, formed 
an article of dress in use among the Indians, but unknown, 
and undescribable by modern Europeans. It seems, notwith- 
standing, to have been in use among their ancestors, being, if 
I mistake not, that very garment, of which Ulysses threatened 
to strip the unhappy Thersytes, the day he made him feel that 
he did not bear the sceptre in vain. 

Ta TaiSoo aiJ.(}>iKakv'7rTei. 

To divest himself of it, was no doubt an inconvenience, but this 
was not to be reckoned in the service of a guest. Accordingly, 
hanging it over his arm, he rubbed his visitor's platter with it 
very carefully, at every change. My friend had nothing for 
it but to honor the care of his host by eating gravely and 
abundantly. Had he done otherwise, the chief, who was him- 
self the most polite of men, would have regarded it as an un- 
pardonable grossierete. 



Note L. Referred to on 'page 149. 

[As to the ulterior effects of wars, revolutions, persecutions, and the like, 
there is of course more to be said than Rae sets forth in the text. Some 
excerpts from his Essay on Education (1843), mentioned in the biographical 
sketch, may be here given to advantage. It will be noticed that his main 
idea is in full accord with that of Bagehot in Physics and Politics. ] 

" The whole earth is strewn with the ruins of empires. 
Civilization seems, at distant intervals, to have assumed 
form, and gathered strength in various points, and from 
each of these in succession, to have spread itself and the 
races that were the possessors of it, over large regions of 
the globe. Now it is very clear that each of these civiliza- 
tions must have had a period of advance, a period when they 
were collecting that amount of knowledge of science and 
arts, and of civil rights and laws, which they possessed at 
the acme of their progress, and which gave them their 
superiority over the other races of their times. Like us, 
each of them must have witnessed a period when the social 
condition was ameliorating from age to age ; like us, they 



AUTHOR'S NOTES 46S 

must have looked forward to still succeeding improvement. 
Yet each of these civilizations nursed within it some disease 
that, coming to activity, nipped the germ of prosperity and 
life, and brought on decay and death. 

" With the exception of Greece, whose contracted territory 
unfits it for a parallel, other antecedent civilizations are 
known to history only in their concluding stages when the 
hand of death was on them. We cannot tell, we can only 
conjecture, what their condition was in the previous and 
more vigorous periods of their existence. But with regard 
to all of them, so far as we can glean anything of them 
from history, or trace them in their monuments, the remark- 
able fact is brought before us that the stage of their being 
immediately preceding their decay, and of course the form 
of existence with which the ruins of them that remain are 
impressed, was that of fixity and immobility. A period of 
torpid repose preceded their decay and dissolution. There 
is also another remarkable fact which we gather by care- 
fully scrutinizing the faint traces, that in several of them 
the ages anterior to the concluding period of repose and 
immobility have left behind them. Preceding this period, 
an era of great strife and contention between the principles 
of which the particular civilization was made up, comes 
pretty distinctly before us. The result of the contest seems 
to have been, the preponderance of one of those main 
elements, and its crushing, subduing, and altogether pre- 
venting any farther expansion of the others, and, by the 
cramped position in which it placed them, occasioning their 
decay and death. 

" It well then becomes all men, having power to exert 
effective action in this our era, to see if we can gather any 
lessons of -instruction from bygone ages, if there be any 
circumstances of the times having a tendency to produce a 
similar conflict of the existing elements of our civilization^, 
possibly resulting in the domination of some of them, with 
like fatal influence." 



464 APPENDIX 



Note M. Referred to on page 296. 

[The following from Rae's unpublished manuscript is not without interest 
in connection with the subject of the elision through taxation of the costs of 
luxury to a society. The special taxtion of the rent of land, if feasible, would 
cut oflf a large part of luxury at the soiirce.] 

" The revenue of every society of men, or nation, is derived 
from three sources, — labor, capital, and land. I have en- 
deavored elsewhere to show that capital consists altogether 
of instruments by means of which man is enabled to draw 
forth for his own use, by the powers which nature has given 
to the bodies within his reach, such articles of necessity, 
comfort, or convenience as his wants urge him to procure. I 
have also endeavored to trace the laws which regulate the 
increase or diminution of this general stock or capital. It is 
a somewhat difficult task to determine the laws regulating the 
distribution of the annual revenue among the powers produc- 
inof it. I believe it is a o-eneral truth which, though to some 
it may appear paradoxical, is nevertheless capable of demon- 
stration from the constitution of man and of external nature, 
that the larger the share falling to labor the more rapid will 
be the increase of capital, and the more prosperous the 
condition of the society. It is certain, however, that the 
portion remaining after labor .and capital have divided their 
shares, naturally falls to land. 

" To get an accurate idea of what the real return of the land, 
or what is called rent, actually is we must separate from what 
ure the natural powers of the soil those additions which art 
may have made to it. Thus much land owes a great part of 
its fertility to some system of drainage which has been 
employed to carry off its superfluous waters. This clearly 
belongs to capital and any return it makes is to be considered 
interest or profit. What may be the real powers of different 
soils in their natural state is a problem not perhaps as yet cap- 
able of being accurately resolved, but which modern chemistry 
promises ere long to give us the means of determining with 
precision. These native powers [and advantages of situation] 
would seem to be the things for which a rent comes in the 
course of time to be paid. Now in examining how this rent 



AUTHOR'S NOTES 465 

is to be appropriated at some future time in some particular 
society, we cannot with propriety take as our standard the 
mode in which it is now appropriated in any existing society 
of men. For society is continually changing its phase over 
the earth, and what we may assume now as the best condition 
of affairs, may at some future day appear quite defective. It 
may be allowable therefore to assume that in the society in 
question it comes at the future period, to which we have 
reference, to be so appropriated as may most conduce to the 
wellbeing of the whole community. Considered thus theoreti- 
cally, I think we may assume that it should be given to those 
purposes which are for the general good. I may name 
education in its largest sense ; rewards to men whose genius, 
talents, or industry have added to the stock of human 
happiness in general or of the one particular society ; the 
supplying the funds necessary for the prosecution of experi- 
ments tending to enlarge the boundaries of human knowledge 
and power : and also a provision for those whom accident has 
deprived of the means of supporting themselves. I may say 
in general, in relieving the community from what is now 
called taxation, but a taxation required for other purposes 
than those upon which it is at present expended." 



2 G 



RESIDUA. 

PASSAGES OMITTED IN SOME PART OF THE TEXT ANI> 
NOT ELSEWHERE REPRODUCED. 

Nwmber 1. From page 1. 

Twenty or thirty years ago, according to the pre- 
vaihng poUtical system, every circumstance in the 
condition of the empire was at variance with what should 
give prosperity to a state. To meet the enormous annual 
expenditure occasioned by the most wasteful of all preceding 
wars, a revenue as enormous was drawn by taxation from 
the people, while, instead of their industry enjoying the 
boasted advantages of perfect freedom, at home it was 
restrained by regulations of old established, and abroad its 
products were legally shut out from every continental port, 
and could only any where force an entrance with much 
hazard, and at heavy expense. 

True : making its power felt through the element that 
had ever been most propitious to it, it had subjugated almost 
every spot on the globe, colonized by Europeans, and by 
this means, in defiance of its enemies, maintained an 
extended commerce with all parts of the world. But this 
vast extent of empire, preserved by force of arms, and at 
great expense, according to the dicta of modern politicians, 
was an evil of the greatest magnitude, and one which, though 
the burden attending it is now reduced to comparative 
insignificance, they are continually assuring us we ought, as 
quickly as possible, to get rid of. 

Notwithstanding all these disadvantages, however, there 



RESIDUA 467 

is no period in its history in which the condition of Great 
Britain was apparently more flourishing. The exertions of 
the laborer were liberally rewarded, the expenditure of the 
capitalist richly repaid. Everything gave token of rapidly 
increasing wealth and abundance. 

The triumph of that cause, in aid of which war had been 
embraced, gave peace to the empire and to Europe. The 
annual expenditure was diminished by one half, and the 
nation was no longer restrained, but in comparatively a very 
trifling degree, from participating in all those advantages, 
which, in every instance, one country, according to prevail- 
ing notions, is supposed to gain by free intercourse with 
another. But, though markets for the manufacture, and 
channels for the commerce of the kingdom were largely 
multiplied, its resources, instead of augmenting, seemed 
diminishing. The whole fabric of society seemed ready to 
sink under the pressure of some new burden, — ruin began to 
threaten, often to overwhelm the man of capital, — want to 
look industry in the face. In vain were taxes to a large 
amount repealed, in vain were endeavors made to trace the 
depression of the times to mere revolutions in the channels 
of trade, and to other temporary causes, and hopes held 
out that they would speedily pass away. The evil proved 
to be not partial and temporary, but pervading and per- 
manent. Far from confidence in the modern science being 
shaken by a result contrary to all its principles, it was 
resolved to seek a remedy for the acknowledged distress, by 
adopting largely the policy which this science inculcates. 

It cannot be denied that the results of the experiment, as 
far as it has hitherto been carried, have been in the whole, 
unhappy. The events which have followed, not to say 
flowed from recent enactments, regulating the internal and 
external commerce of the nation, have been at least 
unfortunate. The operations of the banking system, and 
the extension of general confidence and security in all 
transactions, which that system is calculated to afford, seem 
clogged and restrained. The returns which industry and 
capital receive, have been still farther diminished. Wealth 
is barren. Labor, plied with all the skill, and more than all 



468 APPENDIX 

the assiduity to which human nature is long adequate, does 
not always keep famine at a distance. 



Number 2. From page 5. 

By entering on such an investigation immediately, however, 
the subject will be brought before the reader under an aspect 
so different from that in which it is viewed in the Wealth of 
Nations, and subsequent works following in the same train of 
thought, that I should not have an opportunity of directly 
meeting some of the arguments there advanced. For this 
reason I shall first endeavor to show, that even proceeding on 
similar principles to those adopted in the Wealth of Nations 
itself, there exist great and insuperable objections to the 
doctrines in question. This forms the subject of the First 
Book. In the Second, I enter on the analysis of the nature of 
wealth and the laws governing its increase and diminution.^ 
The Third is devoted to a practical application to the doctrines 
in question, of the principles established. 

Num^ber 3. From, page 204. 

There are then, it would appear from the preceding chapters, 
two great classes into which commodities may be divided ; 
luxuries, and articles of consumption which are not luxuries, 
but, were the term permitted, might be named utilities. When 
the events in which instruments issue are of the latter class, 
then instruments may properly be said to be exhausted ; when 
of the former, they are on the contrary dissipated. 

Number 4. 

The investigations in which we have been engaged in the 
preceding chapters seem to indicate several great causes as 
determining the nature and production of stock. They may- 
be divided into three classes. 

I. Regarding things material. 

1 [Is it an inadvertence that Rae here speaks of his second " Book " as deal- 
ing with " wealth," when the formal title made it deal with " stock " ?] 



RESIDUA 469 

1. The nature of the material world, producing a series of 
events succeeding each other in regular order. 

2. The nature of man, as a being in part material, acted on, 
therefore, by matter, and whose existence and pleasures are, 
consequently, dependent on events taking place among 
material objects. 

3. Also the nature of man, as a being in part material, and 
whose corporeal powers — his labor, enable him to change the 
positions of the matters around him. 

II. Regarding things not material. 

1. The intellectual faculties of man, reaching not to an 
absolute knowledge of the material world, but to a perception 
of the order in which events succeed each other in it, and to 
a discovery of the means of producing events necessary, or 
desirable to him, by applying his corporeal powers to change 
the positions of the materials within his reach. 

2. The moral nature of man, — the motives by which he 
acts, determining the degree in which he will be excited to 
apply himself to the discovery of the order in which events 
succeed each other, and to changing the positions of materials, 
and so constructing instruments producing events ministering 
to future necessities or pleasures. 

Concerning these two last causes, the general conclusions 
at which we arrived were ; that the more the intellectual 
faculties are expanded, the greater the power to extend the 
knowledge of the succession of events, and to form materials 
into instruments ; and that the greater the strength of the 
moral powers — the social and benevolent aflections — the 
greater the desire to discover the order of the succession of 
events, and to apply such discoveries to the formation of 
materials into instruments. And conversely ; that the feebler 
the intellectual faculties and moral powers, the less both the 
ability to discover, and the inclination to apply discoveries to 
the formation of instruments, and the greater the tendency to 
dissipate the capacity of the instruments formed in luxury, 
and to waste it through deceit and violence. 

III. Causes derived partly from the nature of the material 
world, and partly from the nature of man. 

1. Change ; arising from revolutions of all sorts, by which 



470 APPENDIX 

men and arts are moved from region to region. This places 
man and matter in new positions, and discloses to him new 
connexions and relations, in the natures of the bodies within 
reach of his operations. 

2. Servile imitation ; the antagonist of the former, by which 
men are led to operate by rule, and not of knowledge, and the 
progress of invention and improvement are retarded. 

Strength of intellect and moral feeling gives continuity of 
existence to the society, and leading the men composing it to 
take an interest in distant events, extends the operations of 
their powei's to the intelligence, and application to useful 
purposes, of a wide circle of events. Their weakness, and the 
prevalence of the opposing causes, folly and pure selfishness, 
isolates each member of society, contracts the operations of 
the powers of the whole to the consideration and application 
of a narrow circle of events, and dissipates and wastes them, 
in efforts made by each to raise himself superior to others, and 
by force or fraud to take from them what they possess. 

There are thus two great principles, the inventive, and 
accumulative, generating stock and adding to it, and they are 
both excited and moved, and enfeebled and restrained, by 
similar powers. 

I. The inventive principle. 

Its strength extending the power of man, augments stock, 
by carrying the instruments composing it to orders of quicker 
return. It is accompanied by economy, by fidelity to engage- 
ments, by a diminished inclination to luxury and waste. 

Its weakness, by contracting the power of man, prevents 
the augmentation of stock. It is accompanied by extrava- 
gance, by infidelity to engagements, by a propensity to luxury 
and waste. 

II. The accumulative principle. 

Its strength leading men to embrace in their operations a 
wide circle of events, accumulates stock, by giving additional 
capacity to instruments already formed, or by working up 
new materials. It carries instruments to orders of slower 
return, and is accompanied also by economy, by fidelity to 
engagements, by a diminished inclination to luxury and waste. 



RESIDUA 471 

Its weakness, contracting the compass of events on which 
there is an inclination to operate, diminishes stock, by allow- 
ing materials to escape from it, and lie idle, which, formed 
into instruments, would yield abundant, though distant 
returns. Under it instruments can only exist at the more 
quickly returning orders. It is accompanied, also, by extrava- 
gance, by infidelity to engagements, by a propensity to luxury 
and waste. 

The consideration of the mode of operation of these two 
principles suggests the following remark. 

Upon these two principles, the third set of causes referred 
to operate somewhat differently. Change excites the principle 
of invention, but often directly restrains that of accumulation. 
Imitation restrains invention, but does not directly retard 
accumulation. 

The several causes referred to, rank among the chief agents 
in the production of the phenomena which the progress of 
society exhibits. We have considered them separately, but 
they never appear so, always acting in combination. This 
circumstance would not of itself affect any conclusions con- 
cerning them, for it applies to phenomena of all sorts, the 
causes influencing every one being compound. 



Number 5. From page 276. 

Section 1. Narcotics, in so far as their effects are not 
measured by the quantity consumed, may be classed with 
luxuries. 

Section 2. A question concerning the effects resulting from 
their cheapness considered. 

SECTION I. 

In the preceding part of this chapter we have considered 
the loss occasioned to the stock of societies, from part of 
the products that would otherwise be yielded by the industry 
of their members, applied to the formation of instruments, 
being dissipated through the operation of an affection of the 
mind. We are now to consider a similar loss, occasioned by a 



472 APPENDIX 

peculiarity in the combined corporeal and mental constitution 
of man. 

There are various matters that physiologists have attempted 
to comprehend under the general term of narcotics, of which 
the primary operation is directed to the nervous system. 
What their ultimate eftects may be on man, considered 
not in the individual, but in the species, this is not the fit 
place to discuss. There are, however, some general laws that 
belong to them, which it concerns tlie present inquiry to notice. 

1. A gradual increase in the quantity consumed does not 
produce a correspondent increase in the effects first experi- 
enced. One commencing with twenty drops of laudanum, 
if he make a habit of consuming that drug, and attempt 
to continue the effects first experienced, must double, quad- 
ruple, or further increase the quantity. A few glasses of 
wine will at first cause a degree of exhilaration equal to what 
it will take a bottle or two finally to produce. Unlike things 
consumed to satisfy hunger, thirst, or warmth, their effects 
are by no means determined by the quantity consumed. We 
may reckon that a slice of bread, or a glass of water, will one 
year hence supply the wants for which any individual con- 
sumes them, as well as now, however great his consumption of 
these articles may be in the interim. But if a person now 
daily drinks a glass of brandy, there is no saying how many 
glasses, ten years hence, he may find himself obliged to take 
to produce the same effects. This is a property common to all 
narcotics, though not in an equal degree. The effects of tea 
and coffee on the nervous system diminish through use, as well 
as those of brandy and tobacco, though not in an equal degree, 
and the quantity taken may be gradually very greatly aug- 
mented. 

2. The temporary exhilaration produced by the consump- 
tion of these substances is followed by a temporary depres- 
sion. They produce evil as well as good. Whether, when 
taken in small quantities, the former overbalance the latter,, 
or the latter the former, is a point undetermined ; but it is 
well known that as the quantity is increased, the evil effects 
predominate, until at last both the bodily and mental energies 
sink under their operation. Hence what is called the abuse. 



RESIDUA 473 

to which the consumption of all this class of commodities 
is apt to lead. The labor bestowed on them is very often not 
only useless, but absolutely prejudicial to the society. 

3. Their consumption is regulated, in a great degree, by the 
influence of the imitative propensity. We may form a near 
guess whether a person is in the custom of drinking wine, or 
tea, or coffee, or smoking tobacco, from knowing the habits of 
his associates. 

4. Their consumption is also greatly regulated by the pas- 
sion of vanity. This is especially the case, as I have already 
remarked, in vinous liquors. These liquors derive their nar- 
cotic properties from containing a portion of the fluid termed 
alcohol. In addition to its power over the nervous system., 
this substance has that of preventing, or retarding, the changes 
that naturally go on in vegetable juices. Liquors, therefore, 
impregnated with it, long retain their peculiar flavor and 
other properties, and may thus be consumed in times and at 
places remote from those in which they were produced. This 
serves to render them matters on which vanity can easily lay 
hold and convert into luxuries. Besides serving as marks to 
this passion, the vegetable juices and salts contained in these 
liquors have probably other effects. They afford a certain 
degree of nourishment, and present the spirit in a diluted 
form. Hence a part of their medicinal effects, and hence, also,, 
their greater safety as narcotics. The stomach gets loaded 
with them sooner than with diluted alcohol, which might be 
absorbed with less immediate inconvenience to the digestive 
powers, though its permanent effects may be more pernicious. 
In this respect there is a real cause for the preference given 
them, although, in this view also, beer is the best, because the 
safest of all liquors. 

The fermented liquors, produced from the juice of the grape, 
are most esteemed in Europe. It is, however, at least problem- 
atical whether they have, or have not, any great, or indeed any 
real superiority. Their chemical analysis does not show much 
grounds for the preference, and we would not, a priori, con- 
ceive that the substances, which by the art of the chemist may 
be made into a compound not to be distinguished from them, 
would produce a liquid peculiarly beneficial to the constitution,. 



474 APPENDIX 

or agreeable to the palate. ^ If we inquire into the tastes of 
other nations, we find, by the testimony of travellers, that 
over the greater part of the world, they are rather disrelished. 
Captain Basil Hall, in his voyage to Loo Choo, says he has 
found cherry brandy the most generally esteemed liquor 
among all nations, and we maj'' see a reason for the pre- 
ference given to such a beverage. The sensation, with which 
even diluted alcohol at first affects the organ of taste, is 
unpleasant. Most people take some plan to subdue or correct 
its harshness. The mixture of matters themselves pleasant in 
flavor or taste, as in that sort of cordial, one would suppose 
the most effectual and agreeable means of doing so. The 
Chinese have grapes, but make no use of them for the forma- 
tion of fermented liquors. Our European travellers tax them 
in consequence with want of taste and ingenuity. They, in 
turn, are surprised at our folly in manufacturing what seems 
to them a more harsh, and unpleasant, and generally far 
more expensive beverage than theirs. Which has most reason 
on his side, the European or the Chinese, is difficult to deter- 
mine ; for, when the passion of vanity joins with the imitative 
propensity, the two have a singular power in producing obsti- 
nately opposing opinions, especially when they have an organ 
to work on so pliant in the reception of impressions as the 
palate. The fashionable drink of the Prussians of old was 
fermented mare's milk; while the nobles drank this, the 
common people were content with mead. This, at least, can 
be said in favor of the choice, that the latter liquor must have 
been easily got in the country of wild honey, and would there- 
fore be vulgar; the former could only be procured by the 
wealthy, and would therefore indicate rank. 

^ Many thousand pipes of spoiled cider are annually brought to London from 
the country, for the purpose of being converted into port wine. One, probably, 
of the least noxious of the methods of producing the change, is to add to the 
cider beet root juice, alcohol, logwood, and Rhatany root. The interior of the 
cask is then crusted with supertartrite of potash, coloi-ed with Brazil wood, 
that the merchant, after bottling oflF the wine, may impose on his customers by 
taking to pieces the cask, and exhibiting the beautiful dark coloured and fine 
crystalline crust, as an indubitable proof of the age of the wine ; a practice by 
no means uncommon, to flatter the vanity of those who pride themselves in 
their acute discrimination of wines. See Accum on Adtdterations. 



RESIDUA 475 

On the whole, as it must be allowed that vanity has a very 
great influence in determining the preference which is given 
to one sort of alcoholic liquor over another, so it is very diffi- 
cult to determine the point where its operation ceases. This, 
perhaps, can only be done in cases where the degree in which 
some agreeable flavor or relish is possessed is in question, or 
where some positively disagreeable flavor or taste, or injurious 
quality, is communicated in the process of preparation. 

It is also to be observed, with regard to these liquors, that, 
with the exception, perhaps, of the negro, whose physical con- 
stitution is so different from that of the white that no 
conclusion can be drawn from the one to the other, the 
propensity to their consumption is stronger among people 
living at a distance from the equator, than among those who 
inhabit regions lying near it. Were it necessary to assign 
reasons for a fact generally observed, we might find them in 
the grosser feeding of the inhabitants of cold climates, and 
in their diminished susceptibility to the impressions of the 
sexual desires. 

SECTION 2. 

I have discussed the subject of these liquors at a length 
which I fear may appear tedious. Some reasons for having 
done so will show themselves afterwards. There is one that 
has immediately to appear. 

A very important question concerning their consumption 
arises, which, it seems to me, has been too hastily determined, 
and that determination rashly acted on, in a manner that has 
produced very injurious effects.^ As far as we have presently 

^ [Light is thrown upon at least one of the occurrences to which Rae 
here alludes, by the following passage in a communication to the Hawaiian 
Government respecting excise legislation : — ] 

"My attention was first called to this subject about the year 1819. At 
that time the propriety of greatly reducing the duties on ardent spirits was a 
question much agitated in Scotland, my native land ; and while my position 
led me to listen to the discussion going on, my prospects were then such as to 
make that and all other questions connected with the well-being of the people 
a matter of considerable interest to me. The Highlands of Scotland were then, 
and had long been, famous for the manufacture of a sort of whiskey which, 
partly perhaps from its being made in small stills, was thought of superior 
flavour, and was greatly esteemed. The traffic was altogether illicit, and 



476 APPENDIX 

to consider the doctrine and practice, they may, in a great 
measure, be traced to the following passage in the Wealth of 
Nations. 

" Though individuals may sometimes ruin their fortunes by 
an excessive consumption of fermented liquors, there seems to 
be no risk that a nation should do so. Though in every 
country there are many people who spend upon such liquors 
more than they can afford, there are always many more who 
spend less. It deserves to be remarked, too, that if we consult 
experience, the cheapness of wine seems to be a cause, not of 
drunkenness, but of sobriety. The inhabitants of the wine 
countries are, in general, the soberest people of Europe ; 
witness the Spaniards, the Italians, and the inhabitants of the 
southern provinces of France. People are seldom guilty of 
excess in what is their daily fare. Nobody affects the charac- 
ter of liberality and good fellowship by being profuse of a 
liquor which is as cheap as small beer. On the contrary, in 
the countries which, either from excessive heat or cold, pro- 
duce no grapes, and where wine consequently is dear and a 
rarity, drunkenness is a common vice, as among the northern 
nations, and all those who live between the tropics, the 
negroes, for example, on the coast of Guinea. When a French 
regiment comes from some of the northern provinces of France, 

there was a constant struggle between the smugglers and the revenue officers, 
the one striving to carry through their objects by stratagem or force, the other 
endeavouring to bafide them ; so that the magistracy and the courts of justice 
had constantly cases coming before them which were generally settled by fine 
or imprisonment, and not infrequently by transportation. It was proposed to 
put an end to this state of things by greatly reducing the duty on legally 
manufactured whiskey, and bj' authorizing its manufacture in stills of a small 
size. Almost everyone thought that great good would result from such a 
change of system, and laughed at the fears which some few entertained of its 
bad effects on the general morals of tlie people. The authority of Adam 
Smith was cited as decisive of the question, and the measure was carried 
through amid a general acclaim of appi'obation. I own that I was among the 
doubters, and that knowing the habits of my countrymen I feared that the 
immediate and obvious good resulting would be counterbalanced by more 
remote but greater evils. It was in vain for me, however, to open my mouth 
against the general voice, and when I attempted it my impertinence in 
opposing my elders and betters was only excused as one of the eccentricities 
of a strange youth. Time has now shown that I was not far wrong." 



RESIDUA 477 

where wine is somewhat dear, to be quartered in the southern, 
where it is very cheap, the soldiers, I have frequently heard it 
•observed, are at first debauched by the cheapness and novelty 
of good wine ; but after a few months' residence, the greater 
part of them become as sober as the rest of the inhabitants. 
Were the duties upon foreign wines, and the excises upon 
malt, beer, and ale, to be taken away all at once, it might, in 
the same manner, occasion in Great Britain a pretty general 
and temporary drunkenness among the middling and inferior 
ranks of people, which would probably be soon followed by a 
permanent and almost universal sobriety. At present drunken- 
ness is by no means the vice of people of fashion, or of those 
who can easily afford the most expensive liquors. A gentleman 
drunk with ale has scarce ever been seen amongst us." ^ 

The general question that may here be said to be proposed 
is, whether, or not, in any particular country, the cheapness 
or the dearness of intoxicating liquors will most excite to their 
intemperate use ? 

The excessive cheapness of any of these liquors renders it 
incapable of affording any gratification to vanity, and an equal 
cheapness in them all would universally produce the same 
effect. That passion would, therefore, in such a case have to 
turn itself to other objects, and these liquors ceasing to be 
luxuries, one main cause of their consumption would be done 
away with. To excite to their abuse, there would remain only 
the pleasure arising from their intoxicating qualities, joined to 
the facility with which it might be indulged. Whether, or 
not, the ease with which this propensity might be gratified 
would lead to long enduring excess, or the vulgarity of the 
enjoyment to speedy and general temperance, would probably 
depend on various circumstances. — On the climate, whether 
near the equator, or at a distance from it. — On the sort 
of liquor, whether purely alcoholic or mixed with much of 
foreign matter. — On the strength of the effective desire of 
accumulation, for that desire, when strong, leads to a restricted 
consumption of things of which the immediate benefit is 
problematical, and the dangers to futurity, from excess in 
them, very great. If, then, the principle is naturally weak, or 
1 Wealth of Nations, B. IV. c. III. 



478 APPENDIX 

at the moment its action be clogged by the stock of instru- 
ments in the society being wrought fully up to the orders 
correspondent to it, or having passed these, then there will be 
a great probability of injurious and long continued national 
excesses. 

Unless, then, we have the means of knowing perfectly the 
condition in which all these circumstances, and perhaps some 
others, exist in any society, it is impossible to ascertain, with 
any precision, what may be the effect of reducing very greatly 
the price of alcoholic liquors. The national drunkenness that 
Adam Smith speaks of may be short or long, or, for ought that 
we can say, perpetual. Over the greater part of the United 
States of America whiskey has long sold at about a shilling 
sterling per gallon, so that one day's wages of a common 
laborer will purchase a dozen bottles of that spirit. It is 
therefore put out of the class of luxuries as completely as any 
intoxicating liquor can well be. The consumption of it has, 
notwithstanding, been very great, and in few countries have 
instances of injurious excess been more frequent. It is true 
that the evil, now exposed to view stripped of every disguise, 
is seen in all its hideousness, and is in a fair way of being 
corrected. After having endured for more than one genera- 
tion, what Adam Smith terms the period of general drunken- 
ness, is probably passing away. If the cure be thus effected,, 
it may fairly be reckoned radical. Is it in all cases advisable 
to go through a similar course, even with the probability of a 
similar result ? — to induce a season of national drunkenness, 
even with the prospect of the public feeling being effectually 
roused to put down the vice forever ? To me it seems, that 
the remedy is so violent, that in many cases there might be a 
risk of the patient's sinking under its operation. A general 
drunkenness among the middle and inferior classes, however 
temporary, is a thing surely not to be lightly discussed in any 
speculations that lead to practice. Compared with it, the tem- 
porary subjugation of a country by a foreign enemy would, in 
its immediate effects, be a small practical evil. If an experi- 
ment tit to be tried, it should certainly only be so under the 
most favorable circumstances ; to peril it when the vital powers 
are in an enfeebled condition, would be the height of rashness. 



RESIDUA 479 

The analogy which Adam Smith, in the passage quoted, 
draws between the French soldier transported from a part of 
France where wine is scarce, to another where it abounds, and 
a nation suddenly overflowed with an abundance of these 
liquors, will not hold ; for, the imitative propensity, in the one 
case, tends as powerfully to check, as in the other it operates 
to excite to the abuse in question. If a man be brought 
among sober people, he has every chance to remain, or to 
become sober ; if, on the contrary, he get among drunkards, it 
requires all his resolution to avoid becoming one. A nation 
having a taste for these pleasures, and suddenly obtaining the 
means of indulging in them, may be compared to a company 
inclined to be jovial assembled round an abundant table, 
where each excites the other to excess ; a band of soldiers 
living and mixing with the inhabitants of a country where, 
even though cheap, these liquors are temperately consumed, 
may, on the contrary, be compared to an individual partaking 
of his solitary bottle in the midst of those who despise the 
pleasure, and view him with contempt for indulging in it. 

It is, however, particularly to be remarked, that the author 
refers to fermented, not to purely alcoholic liquors, and the 
former are certainly much less apt to lead to excess, than the 
latter. I apprehend, however, that his reasonings in the pre- 
ceding, and one or two other passages, have been generally 
received as applicable to both. 

To return to the subject of narcotics in general, all excess in 
their consumption, whether it be regarded as an application of 
labor to a useless purpose, or to one partially hurtful ; whether 
it proceed from vanity or pernicious habits, may not im- 
properly be termed dissipation, as the articles so consumed 
may be termed luxuries. It is not necessary that we should 
pretend to determine what this loss may in any case amount 
to ; it is sufficient to mark its existence, as a quantity to be 
taken into account in a consideration of the causes, influencing 
the increase or decrease of the national stock. 

Number 6. From page 352. 

The doctrine, as it has been maintained, has the advantage 
or disadvantage of being somewhat paradoxical ; but omitting 



480 APPENDIX 

the consideration of this circumstance, it is worth while to 
•examine whether or not, when applied to practice, it has 
brought about the anticipated results. Of the many instances 
that might be produced of events of this class turning out 
■contrary to the predictions of the votaries of the science, 
I select one from the Cours d'Economie Politique (Vol. 
IV., p. 266) of Mr. Storch, a work which, according to Mr. 
M'Culloch, stands at the head of all those on Political 
Economy ever imported from the continent into England. 

That author brings forward Ireland as an example of great 
prosperity, and very rapid progress in wealth, in consequence 
of that nation following the rules of the system. " The sudden 
and prodigious increase," he observes, " which took place in 
the consumption of spirituous liquors, sugar and tea, soon 
after the union, is the more remarkable, from its having 
occurred at a time when these commodities were charged with 
additional duties, that in any other country would have been 
equivalent to an absolute prohibition. 

"To date from the union, the consumption of wine has 
augmented by half ; and yet the consumers, to buy half more 
than they formerly did, are obliged to pay three times the 
price. As for rum, and other foreign spirits, although the 
duties have been doubled, the consumption has increased 
-eightfold. 

" The importation of tea has risen, since the union, from 
2,260,600 pounds to 3,706,771. The amount of sugar pur- 
chased has risen from 211,209 hundred weight to 447,404, so 
that Ireland consumes more of that nourishing, agreeable, and 
healthy commodity, than both Russia and France conjoined. 
In short, an examination of the table of importations of Ireland 
shows that, with the exception of a small number of articles, 
the additional consumption of those commodities, the pro- 
duction of other countries, of which the increasing demand 
most marks the growing riches of a people, has equalled, 
or rather surpassed the whole consumption before the union. 
The facts which we have thus analyzed," he continues, " present 
a statistical picture altogether singular, and such as the most 
flourishing colonies have never furnished. It is true that, by 
this prodigious increase of importations, the purchases of the 



RESIDUA 481 

people of Ireland have increased in a greater ratio than their 
sales ; but this circumstance, which would spread alarm among 
most other nations, is regarded in Great Britain as a symptom 
of prosperity. I know nothing more calculated to show how 
much those continental governments are deceived, who see 
only objects of alarm in observing the increase of importations. 
' They send the money out of the country, they favor foreign 
industry at the prejudice of domestic, and ruin the inhabitants 
by exciting them to expenses beyond their incomes.' Such is 
the cry of these alarmists. Perhaps I return too frequently to 
a consideration of such errors ; but they are so common, and, 
at the same time, so injurious, that I think it my duty to 
neglect no opportunity to prove their fallacy, whether by 
arguments or by examples ; and what more striking example 
could I oppose to this doctrine than that of the prosperity of 
the Irish?" 

Speaking of the probability of a rise in the price of colonial 
productions, he observes farther, "that it may possibly diminish 
their consumption, but that it is much more likely that the 
Irish, who have acquired a taste for such enjoyments, will work 
still harder, and produce still more linen, hemp, and oats, that 
they may have plenty of sugar and rum. With a people so 
ingenious, all that is requisite is to give them wants, and 
excite them to labor." 

Science is said to be prophetic ; does this then sound like 
her voice. 

Number 7. From page 364. 

But an investigation of all these particulars would extend 
far beyond the bounds which I have prescribed myself. I 
purpose, therefore, to confine myself to two of them, and to 
limit the subject of this book to show that the legislator may 
operate with advantage to the community, 1st, in the transfer 
of foreign arts to his own country ; 2d, in applying to useful 
purposes funds which would otherwise be dissipated in luxury. 

Number 8. From page 375. 

It is only necessary for me here, then, to state very shortly 
the objections, and the answers to them. 

2h 



482 APPENDIX 

It is said capital can only augment by accumulation, and, 
as the interference of the legislator takes something from 
individual revenue, it must also take from the power to 
accumulate, and, consequently, instead of augmenting, must 
tend to diminish the sum of the capitals of all the individuals 
in the society, that is, the national capital or stock. This 
objection proceeds on tvi^o assumptions, the first, that the 
nature of national capital, or stock, about which the whole 
discussion turns, which it is the object of the inquiry to in- 
vestigate, and concerning which scarce two authors of note 
agree in opinion, is known previously to any investigation, 
and is precisely identical with the notion suggested by the 
same term applied to individual wealth. The second, that 
what is generally true concerning individual capital, is univer- 
sally true concerning national capital, and that, as the former 
commonly augments by accumulation, the latter can do so 
in no other manner. 

The answer to this objection is, that the proceedings of the 
legislator may increase the absolute capital and stock of the 
society, the provision, that is, for future wants, embodied in 
the stock of instruments possessed by it, though they may 
not increase, and may even a little diminish its relative 
capital, or the .sum which would be brought out by measuring 
those instruments with one another. That it is the amount of 
the absolute capital of the society, which is the proper measure 
of the wealth of the whole, and of each individual, and that 
whatever augments it not only directly, and of itself, advances 
national wealth, but ultimately, also, does so indirectly, through 
the stimulus given to the accumulative principle, and the 
addition thence arising to relative capital. 

This objection and the answer to it apply to utilities. The 
second objection, now to be considered, refers to the proceed- 
ings of the legislator concerning commodities wholly or in 
part luxuries. 

Number 9. From page 296. 

If the legislator, by an arbitrary and secret act, could 
impose a duty on the share of any commodity consumed by 
an individual, the rest of the community going free, that 



RESIDUA 483 

individual would undoubtedly be exactly so much a loser. It 
would be to him a matter of indijEFerence what the commodity 
in question were. If the circumstances of his condition obliged 
his wife to wear jewels, or him to have a supply of claret on 
his table, an arbitrary impost of the sort on the claret he con- 
sumed, or the jewels his wife wore, would probably be to him 
equivalent, to a like exaction on coals or bread. In the same 
way, a secret remission to a single individual of the duty 
levied on any article, would be just so much gain to him. 

The fundamental error on this subject of Adam Smith, and 
the present prevailing school of political economists in Eng- 
land, lies, in their assuming, that what is true concerning an 
individual, is true, also, concerning a community, and main- 
taining, consequently, that every impost is so much absolute 
loss to the society, and every diminution of it, so much gain. 
Before this assumption can be made good, with regard to any 
particular impost, it is necessary that the three following 
questions concerning it should be determined. 

1st. Will the duty so levied, by directly or indirectly effect- 
ing an improvement in the arts, increase the absolute capital 
of the society ? 

2d. Will it prevent future waste, by the transfer of an art 
producing useful commodities, the supply of which is liable to 
sudden interruptions ? 

3d. Does it fall partly or altogether on luxuries, and is its 
real effect, consequently, not to diminish, by so much, the 
annual revenue of the society, but only to apply a part of it, 
which would otherwise have been dissipated by vanity, to 
supply funds for the necessary expenditure of the legislator ? 

Unless these questions can be all answered in the negative, 
the assumed parallel between the effects of an impost on an 
individual, and on a community, does not hold, and the whole 
reasoning founded on it falls to the ground. 



READER'S GUIDE. 



Original Volume. 



Present Reprint. 



Preface, - 



Table of Contents, 
Introduction, - 



Book I. 
Introduction, - 
Chap. I., - 



Chap. II., 

Book II. 
Introduction, - 
Chaps. I.-VII., 
Chap. VI II., - 



Chap. IX., 

Chap. X., . - - 

Chap. XI., Part I., - 
„ „ Part II., 
Chap. XII. 1 Paragraph, - 



Chap. XIII., - 

)) )5 " " " 

,, ,, 1 Paragraph, 

Clmp. xiV., - 

,, ,, 1 Paragraph, 

„ „ 3 Paragraphs, 

)j )> " " " 

Chap. XV., - 



Appendix, 



Pages Pages 

iii.-vii. =xlv.-l. 
vii.-viii. = 466-468 
viii.-x. =l.-lii. 
xi.-xvi. =v.-xiii. 
1- 5= 1- 5 
5- 6 = 468 



7- 8 = 377-379 

9- 17 = 379-388 

17- 19 = 130-131 

19- 24 = 151-157 

24- 31 = 388-396 

32- 77 = 396-444 



78- 79 = 
80-163= 
164-184= 
185-193= 
193-197= 
198-207= 
208-223= 
223-264= 
265-292= 
292-299= 
300 

300-305 = 
305-312= 
313-315= 
315-317= 
317-318= 
318-319= 
320-323= 
322 
323 

323-327= 
328-349= 
349-350= 
350-351 = 
352-357= 



: 5- 6 

= 7-101 

=102-125 

=297-306 

=125-130 

=218-228 

=132-149 

=158-203 

=245-276 

=471-479 

= 468 

=204-210 

=277-285 

=213-216 

=210-212 

= 282 

=216-217 

=468-471 

= 202 

=357-358 

=229-233 

=329-352 

=479-481 

=352-353 

=237-242 



Author's Preface. 
App., Residua, No. 1. 
Author's Preface. 
Table of Contents. 
Introduction. 
App., Residua, No. 2. 



App., Art. VIII., Part I. 

» 5) » » 

Chap. VIII., Suffix. 
Chap. X., Prefix. 
App., Art. VIII., Part. I. 
„ ,, ,, Part ii. 



Introduction, Suffix. 

Chaps. I.-VII. 

Chap. VIII. 

App., Art. IV., Part I. 

Chap. VIII. 

Cliap. XIII., 1st Half. 

Chap. IX. 

Chap. X. 

App., Art. I. 

App., Residua, No. 5. 

App., Residua, No. 3. 

Chap. XL, 1st Part. 

App., Art. II. 

Chap. XII., 1st Part. 

Chap. XI., 2nd Part. 

App., Art. II., Interpol. 

Chap. XII., 2nd Part. 

App., Residua, No. 4. 

Chap. X., Interpolation. 

App., Art. VI., Ending. 

Chap. XIII., 2nd Half. 

App., Art. V. 

App., Residua, No. 6. 

App., Art. V. 

Chap. XIV. 



READER'S GUIDE 



485 



Original Volume. 



Present Reprint. 



Book III. 
Introduction, 

„ 1 Paragraph, 

Chap. I., - 
Chap. II., 
Chap. III., 





Notes. 






A (reference 


page 


1), - 


387-388 


B( „ 




» 


4), - 


388-390 


C( „ 






) 


8), - 


390 


D( „ 






) 


18), - 


391 


E( „ 








87), - 


392 


^"i „ 






J 


153), - 


392-397 


G( „ 






) 


193), - 


397-412 


H( „ 






) 


249), - 


412 


I( » 






, 


276), - 


412-413 


J( „ 






) 


285), - 


413 


K( „ 






) 


345), - 


413-414 



Pages Pages 

358-362 = 359-364 
362 =481 
363-368 = 364-370 

369-376 = 286-294 
377-381 = 370-375 

381-382 = 481-482 
382-383 = 294-296 

384-385 = 482-483 



=448-450 

=450-452 

= 453 

=453-454 

= 15 

=454-461 

=306-328 

= 185 

=257-258 

=461-462 

= 347 



App., Art. VII., 1st Part. 
App., Eesidua, No. 7. 
App., Art. VII., 2nd Part. 
App., Art. III., 1st Part. 
App., Art. VII., 3rd Part. 
App., Residua, No. 8. 
App., Art. III., 2nd Part. 
App., Residua, No. 9. 



App., Author's Notes, A. 
App., „ „ B. 

App., „ „ C. 

App., „ „ D 

Chap. I., footnote. 
App., Autlior's Notes, F. 
App., Art. IV., Part II. 
Chap. X., footnote. 
App., Art. I., footnote. 
App., Author's Notes, J. 
App., Art. v., footnote. 



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